On 1 July 2020, Sugar Ltd acquired 89% of the shares of Glider Ltd for $690,000. At this date, the equity ofGlider Ltd consisted of;Share Capital: $350,000Retained earnings: $125,000General reserve: $100,000all the identifiable assets and liabilities of Glider Ltd were recorded at amounts equal to fair value exceptfor;Fair ValueCarrying Amount55,000Patent70,000Inventory40,00060,000The tax rate is 30%. partial goodwill method is in use.Required:1. Acquisition analysis at 1 July 20202. Business combination valuation entries at 1 July 20203. Pre-acquisition entries at 1 July 20204. NCI share of equity at acquisition date 1 July 2020

Journal entry: A journal entry is used to record day-to-day transactions of the business by…

On 1 July 2020, Sugar Ltd acquired 89% of the shares of Glider Ltd for $690,000. At this date, the equity of Glider Ltd consisted of; Share Capital: $350,000 Retained earnings: $125,000 General reserve: $100,000 all the identifiable assets and liabilities of Glider Ltd were recorded at amounts equal to fair value except for; Carrying Amount Fair Value Patent 55,000 70,000 Inventory 40,000 60,000 The tax rate is 30%. partial goodwill method is in use. Required: 1. Acquisition analysis at 1 July 2020 2. Business combination valuation entries at 1 July 2020 3. Pre-acquisition entries at 1 July 2020

On 1 July 2020, Sugar Ltd acquired 89% of the shares of Glider Ltd for $690,000. At this date, the equity of Glider Ltd consisted of; Share Capital: $350,000 Retained earnings: $125,000 General reserve: $100,000 all the identifiable assets and liabilities of Glider Ltd were recorded at amounts equal to fair value except for; Carrying Amount Fair Value Patent 55,000 70,000 Inventory 40,000 60,000 The tax rate is 30%. partial goodwill method is in use. Required: 1. Acquisition analysis at 1 July 2020 2. Business combination valuation entries at 1 July 2020 3. Pre-acquisition entries at 1 July 2020

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

On 1 July 2020, Sugar Ltd acquired 89% of the shares of Glider Ltd for $690,000. At this date, the equity of
Glider Ltd consisted of;
Share Capital: $350,000
Retained earnings: $125,000
General reserve: $100,000
all the identifiable assets and liabilities of Glider Ltd were recorded at amounts equal to fair value except
for;
Fair Value
Carrying Amount
55,000
Patent
70,000
Inventory
40,000
60,000
The tax rate is 30%. partial goodwill method is in use.
Required:
1. Acquisition analysis at 1 July 2020
2. Business combination valuation entries at 1 July 2020
3. Pre-acquisition entries at 1 July 2020
4. NCI share of equity at acquisition date 1 July 2020

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