Taylor Ltd, a supplier of music records and equipment, agreed to acquire
Taylor Ltd, a supplier of music records and equipment, agreed to acquire the business of a rival company, Speedy Ltd, taking over all assets and liabilities as at 1 June 2020. The price agreed on was $175,000, payable $150,000 in cash and the balance by the issue to the selling company of 25,000 fully paid shares in Taylor Ltd, these shares having a fair value of $1.00 per share. The trial balances of the two companies as at 1 June 2020 were as follows. Taylor Speedy Dr Cr Dr Cr Share capital 1,200,000 300,000 Retained earnings 420,000 184,000 Accounts payable 97,000 325,000 Cash …
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