Unicorn Ltd acquired 80% of the issued shares of Pegasus Ltd for $685,700 on 1 July 2020. The financial statements of Pegasus Ltd showed the following items of equity: Share capital$565,500 Retained earnings$247,400 At acquisition date all the identificable assets and liabilities of Pegasus Ltd were recorded at amounts equal to fair value except for the following: Carrying amountFair value Land $395,900$424,100 During the year end 30 June 2021, Pegasus Ltd recorded at profit of $84,800. The tax rate is 30%. Required: Show the acquisition analysis as at 1 July 2020 and prepare the consolidated worksheet entries at 30 June 2021 for Unicorn Ltd assuming that it adopts the partial goodwill method.

The consolidated financial statements are the financial statements that are created by merging the…

Answered: Unicorn Ltd acquired 80% of the issued…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Unicorn Ltd acquired 80% of the issued shares of Pegasus Ltd for $685,700
on 1 July 2020. The financial statements of Pegasus Ltd showed the following items of equity:


	Share capital	$565,500
	Retained earnings	$247,400

At acquisition date all the identificable assets and liabilities of Pegasus Ltd were recorded at
amounts equal to fair value except for the following:

			Carrying amount	Fair value
	Land		$395,900	$424,100

During the year end 30 June 2021, Pegasus Ltd recorded at profit of $84,800.
The tax rate is 30%.

Required:
Show the acquisition analysis as at 1 July 2020 and prepare the consolidated worksheet
entries at 30 June 2021 for Unicorn Ltd assuming that it adopts the partial goodwill method.