P Markets Co. purchased 60% of S Ltd’s ordinary share capital on 1 January 20X4 for $540,000. The retained earnings of S Ltd at that date were $90,000. S Ltd’s share capital has remained unchanged since the acquisition. The additional information relates to the year ended 31 December 20X6. P Markets S $000 $000 Non-current assets Property plant and equipment 600 200 Investments 540 Current assets Inventory 230 80 Trade receivables Bank 140 42 Bank 40 13 Total assets 1,550 335 Equity and liabilities Equity Share capital ($1 each) 100 10 Retained earnings 1,100 240 Non-current liabilities Loan notes 40 20 Current liabilities Trade payables 310 65 Total equity and liabilities 1,550 335 The following information is relevant: (1)The directors have deemed the fair value of the non-controlling interest at acquisition to be $360,000. Fair value of S Ltd’s net assets at acquisition a. Equity share capital? b. Retained earnings? c. Total fair value of S Ltd’s net assets at acquisition? d. Goodwill at acquisition?
P Markets Co. purchased 60% of S Ltd’s ordinary share capital on 1 January 20X4 for $540,000. The
The additional information relates to the year ended 31 December 20X6.
P Markets S
$000 $000
Non-current assets
Property plant and equipment 600 200
Investments 540
Current assets
Inventory 230 80
Trade receivables Bank 140 42
Bank 40 13
Total assets 1,550 335
Equity and liabilities
Equity
Share capital ($1 each) 100 10
Retained earnings 1,100 240
Non-current liabilities
Loan notes 40 20
Current liabilities
Trade payables 310 65
Total equity and liabilities 1,550 335
The following information is relevant:
(1)The directors have deemed the fair value of the non-controlling interest at acquisition to be $360,000.
Fair value of S Ltd’s net assets at acquisition
a. Equity share capital?
b. Retained earnings?
c. Total fair value of S Ltd’s net assets at acquisition?
d.
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