Part A Consolidation Non-Controlling Interestr Sunshine Ltd acquired 85% of the shares (ex div) of Rain Ltd on 1 July 2020 for $400 000. At this date, the equity of Rain Ltd consisted of: Share capital $ 190 000 Asset Revaluation Reserve 60 000 Retained earnings 70 000 At acquisition date all the identifiable assets and liabilities of Rain Ltd were recorded at amounts equal to fair value except the following: Carrying Amount Fair value 30 000 35 000 Inventory Patent 85 000 95 000 Equipment (cost 100 000) 80 000 90 000 Equipment was depreciated at 10% using straight line method. On 30 June 2022, the equity of Rain consisted of. Share capital $190 000 Asset Revaluation Reserve 100 000 Retained earnings 120 000 During the 2021-2022 year Rain Ltd recorded a profit of $60 000. Dividend payable $40 000 Required PART A Calculate the Acquisition Analysis assuming Sunshine uses the Partial Goodwill method. Show all workings.

Part A Consolidation Non-Controlling Interestr Sunshine Ltd acquired 85% of the shares (ex div) of Rain Ltd on 1 July 2020 for $400 000. At this date, the equity of Rain Ltd consisted of: Share capital $ 190 000 Asset Revaluation Reserve 60 000 Retained earnings 70 000 At acquisition date all the identifiable assets and liabilities of Rain Ltd were recorded at amounts equal to fair value except the following: Carrying Amount Fair value 30 000 35 000 Inventory Patent 85 000 95 000 Equipment (cost 100 000) 80 000 90 000 Equipment was depreciated at 10% using straight line method. On 30 June 2022, the equity of Rain consisted of. Share capital $190 000 Asset Revaluation Reserve 100 000 Retained earnings 120 000 During the 2021-2022 year Rain Ltd recorded a profit of $60 000. Dividend payable $40 000 Required PART A Calculate the Acquisition Analysis assuming Sunshine uses the Partial Goodwill method. Show all workings.

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

Part A Consolidation Non-Controlling Interester
Sunshine Ltd acquired 85% of the shares (ex div) of Rain Ltd on 1 July 2020 for
$400 000. At this date, the equity of Rain Ltd consisted of:
Share capital
$ 190 000
Asset Revaluation Reserve
60 000
Retained earnings
70 000
At acquisition date all the identifiable assets and liabilities of Rain Ltd were recorded at amounts equal to fair value except the following:
Carrying Amount
Fair value
30 000
35 000
Inventory
Patent
85 000
95 000
Equipment (cost 100 000)
80 000
90 000
Equipment was depreciated at 10% using straight line method.
On 30 June 2022, the equity of Rain consisted of:
Share capital
$ 190 000
Asset Revaluation Reserve
100 000
Retained earnings
120 000
During the 2021-2022 year Rain Ltd recorded a profit of $60 000. Dividend payable $40 000
Required
PART A
Calculate the Acquisition Analysis assuming Sunshine uses the Partial Goodwill method.
Show all workings..

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