171819202122232425262728293031323334353637Griffin Ltd acquired all the issued shares (cum div.) in Python Ltd on 1 July 2020, paying 5905 000 cash.Costs incurred in undertaking the acquisition amounted to $7 000, these did not relate to issuing the new shares.On 30 June 2020, the financial statement of Python Ltd showed the following balances:Share capital (12,000 shares @50 each)Retained earningsDividend payableGoodwill$600,000$270,000$36,000$17.500All the identifiable assets and liabilities of Python Ltd at the acquisition date were recorded at amounts equal to their fair values except for:Fair valueInventoryPlant (Cost $1,250,000)Carrying amount$60,000$875,000$52,000$887,000The assets recognised by Python Ltd did not include an internally generated patent of Python Ltd that was valued by Griffin Ltd at $28,000.its useful life was considered to be 4 years, with benefits being received equally over that period.80% of the inventory on hand at the acquisition date was sold by 30 June 2021. The plant is expected to have a further useful life of 5 years. The tax rate is 30%Required:Show the acquisition analysis as at 1 July 2020 and prepare the pre-acquisition consolidation worksheet at 30 June 2021,using the worksheet provided below for the preparation of the consolidated financial statements of Griffin Ltd.Assume that goodwill is accounted for as a Business Combination Valuation Reserve (BCVR) entry.

The consideration transferred by Griffin Ltd is the cash paid $905,000 plus the costs incurred in…

Required: Show the acquisition analysis as at 1 July 2020 and prepare the pre-acquisition consolidation worksheet at 30 June 2021, using the worksheet provided below for the preparation of the consolidated financial statements of Griffin Ltd. Assume that goodwill is accounted for as a Business Combination Valuation Reserve (BCVR) entry.

Required: Show the acquisition analysis as at 1 July 2020 and prepare the pre-acquisition consolidation worksheet at 30 June 2021, using the worksheet provided below for the preparation of the consolidated financial statements of Griffin Ltd. Assume that goodwill is accounted for as a Business Combination Valuation Reserve (BCVR) entry.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

At December 31, 2023, Sandhill Corp's general ledger includes the following account balances: Copyrights $52500 Deposits with advertising agency (will be used to promote goodwill) 43000 Discount on bonds payable 74000 Excess of cost over fair value of identifiable net assets of acquired subsidiary 589500 Trademarks 106000 In the preparation of Sandhill's balance sheet as of December 31, 2023, what should be reported as total intangible assets? O $158500 O $748000 $791000 O $822000
16.Explain the process of accounting for mergers and acquisitions. How are the assets and liabilities of the acquired company recorded on the balance sheet of the acquiring company? Discuss the treatment of goodwill and any adjustments that might be necessary post-acquisition. Provide an example of a hypothetical merger and the journal entries that would be recorded.
Which of the following is/are true regarding goodwill achieved through acquisition as part of business combination? Where the acquirer was able to purchase the business at a discount, the excess of the market capitalization over the consideration transferred will be recognized in profit or loss. The acquirer shall recognize goodwill as of the acquisition date measured as the excess of the aggregate of the consideration transferred over the net of the fair values of all the assets acquired and the liabilities assumed Group of answer choices Both statements are true. None of these statements are true. 2 only. 1 only.
In The Process Of the Acquisition, ABC Incorporation Paid In Cash the Following Expenses US Accounting fees 30,000 Travel expenses 10,000 Accounting fees (SEC) 10,000 SEC filing fees 20,000 Required: Prepare the journal entry to record the acquisition expenses