On 1 July 2020, P Ltd acquired 80% of the issued ordinary shares of S Ltd. At thatdate, the plant of S Ltd, with a cost price of N$250,000 and a carrying amount ofN$150,00, was revalued at N$200,000. At that stage, P Ltd also confirmed theoriginal estimated useful life of the plant as 10 years. Required Provide theconsolidated journal entries for 31 December 2022 financial year.

A journal entry is a basic accounting record that is used to chronologically track financial…

Answered: On 1 July 2020, P Ltd acquired 80% of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Brick Ltd acquired 80% of the shares in Mortar Ltd on 1 January 2019 for an initial consideration of £39,000,000 cash and a further £13,000,000 will be paid on 1 January 2021. On 1 January 2019, Mortar Ltd had retained earnings of £7,800,000 and the market price of its shares was £1.50 per share. The Statement of Financial Position of Brick Ltd and its subsidiary Mortar Ltd as at 31 December 2019 are as follows: Brick Ltd £000 Mortar Ltd £000 Non-current Assets: Property, plant and equipment at cost 65,000 52,000 Investment in Mortar Ltd 50,791 115,791 52,000 Current Assets: Inventories 3,900 10,400 Trade receivables: Brick Ltd 13,000 Other 20,800 9,100 Cash 2.600 27.300 32,500 84,500 Total Assets 143.091 Equity and Liabilities Еquity Ördinary Share Capital at £1 each 58,500 32,500 Revaluation Reserve 15,600 6,500 Retained earnings 33,210 107,310 36.400 75,400 Liabilities Non-Current Liabilities: Deferred consideration for Investment in Mortar Ltd. 12,381 Current Liabilities: 10,400…
On 30 June 20X7, Edison Ltd acquired all the assets and liabilities of Oliver Ltd, with Oliver Ltd going into liquidation. In exchange for these assets and liabilities, Edison Ltd issued 60,000 shares, and the fair value of each share at the acquisition date is $4. Costs of issuing these shares amounted to $2,000. Legal costs associated with the acquisition of Oliver Ltd amounted to $1,500. The assets and liabilities of Oliver Ltd at 30 June 20X7 were as follows: Carrying amount Fair value Cash 12 000 12 000 Accounts receivable (Cost: $45 000, Estimated uncollectable debts: $5000) 40 000 36 000 Inventory 60 000 76 000 Plant (Cost: $200 000, Accumulated 120 000 145 000 depreciation: $80 000) Accounts payable 40 000 40 000 Additional information: • Oliver Ltd had not recorded an internally developed patent. Edison Ltd valued this at $26,000. Oliver Ltd had not recorded a legal claim as a liability due to the uncertainty of an outcome. Edison Ltd estimated the fair value of this…
On 1 July 2019, Christina Ltd acquired all the issued shares of Adeline Ltd, paying $120 000 cash and transferring 100 000 of its own shares to Adeline Ltd’s former shareholders. At that date, the financial statements of Adeline Ltd showed the following information. Share Capital $100000 General Reserve 50000 Retained Earnings 150000 All the assets and liabilities of Adeline Ltd were recorded at amounts equal to their fair values at the acquisition date. The fair value of Christina Ltd’s shares at acquisition date was $2 per share. Christina Ltd incurred $30 000 in acquisition‐related costs that included $5000 as share issue costs. Required Prepare the acquisition analysis at 1 July 2019. Prepare the journal entries for Christina Ltd to recognise the investment in Adeline Ltd at 1 July 2019. Prepare the consolidation worksheet entries for…

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On 1 July 2020, P Ltd acquired 80% of the issued ordinary shares of date, the plant of S Ltd, with a cost price of N$250,000 and a carryin N$150,00, was revalued at N$200,000. At that stage, P Ltd also confi