PKT Ltd acquired 80% of the ordinary shares of CF Ltd. The net assets were fairly valued on 1 January 2021 except for machinery that were undervalued by R550 000. The machine was purchased on 1 January 2020 for R1 250 000 and had a useful life of 5 years. No adjustments at acquisition for the above matter. Prepare the journal entries (with narrations) for the year ended 31 December 2022. Assume a tax rate of 30%
PKT Ltd acquired 80% of the ordinary shares of CF Ltd. The net assets were fairly valued on 1 January 2021 except for machinery that were undervalued by R550 000. The machine was purchased on 1 January 2020 for R1 250 000 and had a useful life of 5 years. No adjustments at acquisition for the above matter. Prepare the journal entries (with narrations) for the year ended 31 December 2022. Assume a tax rate of 30%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please answer in text form without image,, every entry should have narrated
Transcribed Image Text:PKT Ltd acquired 80% of the
ordinary shares of CF Ltd. The
net assets were fairly valued on 1
January 2021 except for
machinery that were
undervalued by R550 000. The
machine was purchased on 1
January 2020 for R1 250 000
and had a useful life of 5 years.
No adjustments at acquisition for
the above matter. Prepare the
journal entries (with narrations)
for the year ended 31 December
2022. Assume a tax rate of 30%
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