Tinto 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 000
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Q5
Tinto 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 000 |
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Journalize the above transaction in the books of Tinto ltd.
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- Item No. 6 is based on the following information: 091 of the Ismuoler 8 san9qx3 noitesinsano 1 000,SI 9 Kiss Company received a building in exchange for the company's 6,000 ordinary shares with a par value of P 1,000 per share. On the date of exchange, the carrying amount of the building was P 3,850,000 while its fair value was 1 P 6,400,000. The shares were trading in the stock exchange at P 1,100 per share. 000,A I 6. What would be the effect of the foregoing transaction on the total share premium? 900 PLS a. P 400,000 increase. muims19 s c. P 6,000,000 increase. d. P 6,400,000 increase. b. P 600,000 decrease.Q2 Maenetja Limited acquired 1000 shares in Manana Limited on 1 December 2014 at the fair value of R15 per share. Transaction costs amounted to R200. At the date of acquisition the company elected to recognize subsequent changes in the fair value of this investment in other comprehensive income (OCI). The company’s policy is to release any gains or losses resulting from these fair value adjustments to retained earnings when the shares are sold. On 31 December 2014 the market value of Manana Limited’s shares was R18. On 30 June 2015, 200 shares were sold for R19.50. The market value of the shares at 31 December 2015 was R14. What are the correct journal entries that should be recorded initially when the shares purchased on 1 December 2014? Select one: a. DR Investment R15 000DR Transaction costs R200 CR Bank/Liability R15 200 b. DR Investment R15 000…Question 1 Ewig Berhad acquired 800, 000 out of the 1, 000, 000 RM1 ordinary shares of Leben Berhad on 1 January 2020 for RM900, 000 cash. The general reserves and retained earnings of Leben Berhad at the date of acquisition were RM400, 000 and RM250, 000 respectively. Required: (a) What is the percentage of acquisition by Ewig Berhad? (b) What is the corporate relationship in this situation? (c) Based on MFRS 10, briefly explain whether Ewig Berhad exercises control over Leben Berhad. (d) Assuming the proportional net asset method is used, what is the fair value of the NCI? (e) What is the goodwill or bargain purchase?
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- Question 1 On January 2020, RITZ Ltd acquired 80% of the ordinary shares of AUGE Ltd. The group accountant has calculated that the goodwill arising on acquisition was GH₵8,000,000. However, the financial controller has uncovered a number of errors and requires advice about how to resolve them. No entries have been posted in respect of contingent cash consideration that work be paid in 2025 if AUGE meets targets. The contingent consideration had a fair value of GH₵800,000 at acquisition and was calculated using a discount rate of 10% No fair value adjustment has been recorded in respect of AUGE’s non-depreciable land. This land had a carry amount of GH400,000 at acquisition and a fair value of GH₵600,000. AUGE’s brand is internally generated and has not been recognized in the consolidated financial statement. At acquisition it had a fair value of GH₵1,000,000 and a remaining estimated useful life of 5 years. Acquisition cost of GH₵100,000 incurred towards the acquisition process has…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 750On 1 July 2023 Kang Ltd issued ordinary shares to acquire a 30% interest in Aroo Ltd. On this date, these issued shares had a fair value of $320 000. The directors of Kang Ltd believe that they have significant influence over the financial and operating policy decisions of Aroo Ltd. The share capital, reserves and retained earnings of Aroo Ltd at the acquisition date and at 30 June 2024 were as follows. 1 July 2023 30 June 2024 Share capital $450 000 $450 000 Asset revaluation surplus - 140 000 General reserve - 35 000 Retained earnings 200 000 180 000 $650 000 $805 000 At 1 July 2023, all the identifiable assets and liabilities of Aroo Ltd were recorded at fair value. The following is applicable to Aroo Ltd for the year to 30 June 2024. Profit (after income tax expense of $11 000): $86 000. Increase in reserves: General (transferred from retained earnings): $25 000. Asset revaluation (revaluation of freehold land and buildings at 30 June 2024): $140 000.…
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