On July 1 2021, Sunflower Ltd acquired 60% of share capital of Lilly Ltd for $60,000,000. Equity of Lilly Ltd at acquisition date was: Share capital $ 54,000,000 General reserve $ 12,000,000 Retained earnings $ 6,000,000 All assets of Lilly Ltd were recorded at fair value on acquisition except for an item of machinery that had a higher fair value ($1500,000) than its carrying amount. Cost of equipment was $15,000,000 with an accumulated depreciation of $9,000,000. Required: Complete the worksheet below using the NET method. Elimination of Investment in Lilly Ltd Lilly Ltd (S) $,000 Sunflower Ltd (60% of Lilly (P) $,000 40% NCI $,000 Fair Value of consideration transferred Less: FV of identifiable assets acquired & liabilities assumed Share capital on acquisition date 54,000 General reserve-acquisition date 12,000 Retained earnings-acquisition date 6,000 Fair value adjustment Goodwill on acquisition Non-controlling interest
On July 1 2021, Sunflower Ltd acquired 60% of share capital of Lilly Ltd for $60,000,000.
Equity of Lilly Ltd at acquisition date was:
Share capital $ 54,000,000
General reserve $ 12,000,000
All assets of Lilly Ltd were recorded at fair value on acquisition except for an item of machinery that had a higher fair value ($1500,000) than its carrying amount. Cost of equipment was $15,000,000 with an
Required:
Complete the worksheet below using the NET method.
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Elimination of Investment in Lilly Ltd |
Lilly Ltd (S) $,000 |
Sunflower Ltd (60% of Lilly (P) $,000 |
40% NCI $,000 |
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Fair Value of consideration transferred |
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Less: FV of identifiable assets acquired & liabilities assumed |
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Share capital on acquisition date |
54,000 |
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General reserve-acquisition date |
12,000 |
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Retained earnings-acquisition date |
6,000 |
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Fair value adjustment |
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Non-controlling interest |
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