Q5Tinto Ltd obtained control of Suda ltd by acquiring 80% of the issued share capital of Suda ltd at 1 January 2015. The consideration is to be settled as follows:· A cash payment of R1 000 000· The fair value of machine is R500 000 is recorded in Tinto ltd· Tinto ltd will issue new shares to the seller, to the value of R600 000Journalize the above transaction in the books of Tinto ltd.

Journal entry is a primary entry that records the financial transactions initially. The transaction…

Answered: Tinto Ltd obtained control of Suda ltd…

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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B8.
P Limited obtained control with the acquisition of an 80% equity interest in the share capital of S Limited on 1 January20.9 and paid R100 000 cash and transferred 10 000 ordinary equity shares in W Limited, with a market value of R4 pershare, to settle the purchase price of R140 000 for the acquisition of an 80% interest.How much will be recorded as the Investment in S Ltd in the separate financial statements of S Ltd?Select one:a.R100 000b.R110 000c.R140 000d.R80 000
On 1 July 2015, Monageng Limited concluded an agreement to purchase 75% of the ordinary shares in Selongo Limited. The terms of the purchase agreement include, among other things, the following: • Monageng Limited will settle for the 75% of the ordinary shares by paying cash of R200 000 in addition to issuing 100 000 of its own 10% preference shares to the owners of the 75% ordinary shares on 30 September 2015. The price of the10% preference shares on 30 September 2015 was R2.50 each. • Monageng Limited will only be able to appoint its directors to the board of Selongo Limited on 1 August 2015 after the year end date of Selongo Limited which is on 31 July 2015. All the ordinary shares of Selongo Limited are entitled to vote at the company's AGM but preference shares are not entitled to vote. What is the value of the purchase consideration? Select one: O a. R200 000 O b. R300 000 O . R250 000 O d. R450 000
answer both a and b
N 1 Dwani Ltd acquired all the issued shares (cum div.) of Power Ltd for $653 000 on 1 January 2022. At that date, the equity of Power Ltd was recorded as follows. Share capital $ 400 000 General reserve 88 000 Retained earnings 90 000 On 1 January 2022, the records of Power Ltd showed that the company had previously recorded a goodwill at cost of $15 000. Further, Power Ltd had a dividend payable of $25 000, the dividend to be paid in March 2022. All other assets and liabilities were carried at amounts equal to their fair values at the acquisition date, except some inventories recorded at $20 000 below their fair value. Also, Dwani ltd identified at the acquisition date a patent with a fair value of $45 000 that Power Ltd has not recorded in its own accounts. Required: Prepare the consolidation worksheet entries for Dwani Ltd’s group on 30 June 2022 assuming the consideration transferred was $500 000.
L2-4 Awe Company pays CU500,000,000 for a 30% interest in Groy Company on July 1, 19x2 when the book value of Groy Company's net assets equals fair value. Awe Company amortizes any goodwill from this investment over 20 years. Information related to Groy Company is as follows: 31 Desember 19x1 31 Desember 19x2 Share capital, nominal IDR 1,000 Rp600.000.000 Rp600.000.000 Retained earning 400.000.000 500.000.000 Total Shareholders' Equity 1.000.000.000 1.100.000.000 Net profit earned during the year 19x2 200.000.000 Dividend for the year 19x2 (paid on March 1 of Rp. 50,000,000 and September 1 of Rp. 50,000,000) 100.000.000 Required: calculate Awe Company's revenue from Groy Company for the year 19x2
On 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of Jamuna Ltd for a cash consideration of $360 000. At the date of acquisition, the shareholders’ equity of Jamuna Ltd is:Share capitalRetained earningsTotal shareholders’ equityAdditional information$450 000 $300 000 750 000• On the date of acquisition, buildings have a carrying amount in the accounts of Jamuna Ltd of $240 000 and a market value of $300 000. The buildings have an estimated useful life of 10 years after 1 July 2014.• For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90 000, from which it pays a dividend of $30 000.• For the year ending 30 June 2016 Jamuna Ltd records an after-tax profit of $300 000, from which it pays a dividend of $150 000.• Assume a tax rate of 30% is assumedRequiredApply equity method of accounting to:(a) Calculate the amount of goodwill at the date of acquisition (3 marks) (b) Preparethejournalentriesfortheyearending30June2015(3marks) (c) Prepare the…
Q25 On 1 June 2013, Sun Ltd acquired 75% interest (and control) over Savy Ltd by acquiring 570 000 of the issued ordinary shares of Savy Ltd. The consideration paid was settled in cash amounting to R810 000. On this date the retained earnings of Savy Ltd amounted to R125 000 and 760 000 ordinary shares worth R950 000. The Sun Ltd Group measures non-controlling interests in an acquiree at its proportional share of the aquiree’s identifiable net assets at acquisition date (partial goodwill method). On 31 December 2015, goodwill was tested for impairment and it was determined by the directors of Sun Ltd that the goodwill was impaired with R2 750 at the end of the current financial year. The amount that will be disclosed as goodwill in the consolidated statement of financial position of the Sun Ltd Group as at 31 December 2015, is_______. Select one: a. R1 000 b. RNIL c. R269 750 d. R3 750

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