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On 1st January 2016, Soft Ltd acquired 70% of share capital of Hard Ltd for $8,175,000. Equity of Hard Ltd was:                         Share capital                             $7,600,000                         General reserve            $2,100,000                         Retained earnings                     $1,200,000 All assets of Hard Ltd were recorded at fair value on acquisition except for an item of marine equipment that had a higher fair value of $360,000 than its carrying amount. Cost of the marine equipment was $2,100,000 accumulated depreciation of $1,372,000. Prepare the journal entry to recognise the Non-controlling interest

On 1st January 2016, Soft Ltd acquired 70% of share capital of Hard Ltd for $8,175,000. Equity of Hard Ltd was:                         Share capital                             $7,600,000                         General reserve            $2,100,000                         Retained earnings                     $1,200,000 All assets of Hard Ltd were recorded at fair value on acquisition except for an item of marine equipment that had a higher fair value of $360,000 than its carrying amount. Cost of the marine equipment was $2,100,000 accumulated depreciation of $1,372,000. Prepare the journal entry to recognise the Non-controlling interest

FINANCIAL ACCOUNTING
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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On 1st January 2016, Soft Ltd acquired 70% of share capital of Hard Ltd for $8,175,000. Equity of Hard Ltd was:

                        Share capital                             $7,600,000

                        General reserve            $2,100,000

                        Retained earnings                     $1,200,000

All assets of Hard Ltd were recorded at fair value on acquisition except for an item of marine equipment that had a higher fair value of $360,000 than its carrying amount. Cost of the marine equipment was $2,100,000 accumulated depreciation of $1,372,000.

Prepare the journal entry to recognise the Non-controlling interest

 

Hard Ltd Soft Ltd 30% NCI Elimination of investment in Hard Ltd (S) $,000 (P) $,000 $,000 Fair Value of consideration transferred Less: FV of identifiable assets acquired and liabilities assumed Share capital on acquisition date Revalue surplus-acquisition date Retained earnings-acquisition date Fair value adjustment Goodwill/ Gain on acquisition NON-controlling interest
Transcribed Image Text:Hard Ltd Soft Ltd 30% NCI Elimination of investment in Hard Ltd (S) $,000 (P) $,000 $,000 Fair Value of consideration transferred Less: FV of identifiable assets acquired and liabilities assumed Share capital on acquisition date Revalue surplus-acquisition date Retained earnings-acquisition date Fair value adjustment Goodwill/ Gain on acquisition NON-controlling interest
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