Seleco Bhd acquired 800,000 ordinary shares, 90,000 preference shares and 120,000debentures of Marco Bhd on 1 January 2020 a cost of RM1,200,000, RM90,000 and RM120,000respectively by cash. On the date of acquisition, the balance of Marco Bhd equity and liabilitiescomprise the following:Ordinary share capitalPreference share capitalRM1,000,000 (1,000,000 units)RM200,000 (200,000 units)RM200,000 (200,000 units)RM200,000Rm100,000DebenturesRetained profitGeneral reserveOn the same day a property was revalued at RM40,000 more than its carrying value.Non-controlling interest was valued based on proportion of fair value of net asset of Marco on thedate of acquisition.Required:a. Compute goodwill / bargain purchase.b. Determine the consolidation journal entries to record the above acquisition for preferenceshares and debentures.

Goodwill is an intangible asset that can't be seen or touched but provides future benefits to the…

Seleco Bhd acquired 800,000 ordinary shares, 90,000 preference shares and 120,000 debentures of Marco Bhd on 1 January 2020 a cost of RM1,200,000, RM90,000 and RM120,000 respectively by cash. On the date of acquisition, the balance of Marco Bhd equity and liabilities comprise the following: Ordinary share capital Preference share capital Debentures RM1,000,000 (1,000,000 units) RM200,000 (200,000 units) RM200,000 (200,000 units) RM200,000 Rm100,000 Retained profit General reserve On the same day a property was revalued at RM40,000 more than its carrying value. Non-controlling interest was valued based on proportion of fair value of net asset of Marco on the date of acquisition. Required: a. Compute goodwill / bargain purchase. b. Determine the consolidation journal entries to record the above acquisition for preference shares and debentures.

Seleco Bhd acquired 800,000 ordinary shares, 90,000 preference shares and 120,000 debentures of Marco Bhd on 1 January 2020 a cost of RM1,200,000, RM90,000 and RM120,000 respectively by cash. On the date of acquisition, the balance of Marco Bhd equity and liabilities comprise the following: Ordinary share capital Preference share capital Debentures RM1,000,000 (1,000,000 units) RM200,000 (200,000 units) RM200,000 (200,000 units) RM200,000 Rm100,000 Retained profit General reserve On the same day a property was revalued at RM40,000 more than its carrying value. Non-controlling interest was valued based on proportion of fair value of net asset of Marco on the date of acquisition. Required: a. Compute goodwill / bargain purchase. b. Determine the consolidation journal entries to record the above acquisition for preference shares and debentures.

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

Seleco Bhd acquired 800,000 ordinary shares, 90,000 preference shares and 120,000
debentures of Marco Bhd on 1 January 2020 a cost of RM1,200,000, RM90,000 and RM120,000
respectively by cash. On the date of acquisition, the balance of Marco Bhd equity and liabilities
comprise the following:
Ordinary share capital
Preference share capital
RM1,000,000 (1,000,000 units)
RM200,000 (200,000 units)
RM200,000 (200,000 units)
RM200,000
Rm100,000
Debentures
Retained profit
General reserve
On the same day a property was revalued at RM40,000 more than its carrying value.
Non-controlling interest was valued based on proportion of fair value of net asset of Marco on the
date of acquisition.
Required:
a. Compute goodwill / bargain purchase.
b. Determine the consolidation journal entries to record the above acquisition for preference
shares and debentures.

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