On 1 July 2018, Red River Ltd acquired 70% of the share capital of Mekong Ltd for $1,200,000. The equity of Mekong Ltd was:

Share Capital                     $1,050,000

General Reserve               $   300,000

Retained Earnings            $   150,000


All assets of Mekong Ltd were recorded at Fair Value (FV) on acquisition, except for a piece of equipment that had a higher FV ($50,000) than its carrying amount. The cost of the equipment was $300,000, and accumulated depreciation is $196,000. The tax rate is 30%



Complete the worksheet below using the “Gross Method”.

Elimination of investment is subsidiary (Mekong Ltd) Mekong Ltd         $ Red River Ltd 70% interest 30% NCI    $
FV of consideration transferred 1,200,000   1,200,000
*Plus NCI measured at FV
less FV of assets acquired, liabilities assumed
Share capital on acquisition date 1,050,000    
General Reserve on acquisition    300,000    
Retained earnings on acquisition    150,000    
FV adjustment    
Fair Value of Net Identifiable Assets acquired
Goodwill on acquisition date
Non-controlling interest


Click on Buy Solution and make payment. All prices shown above are in USD. Payment supported in all currencies. Price shown above includes the solution of all questions mentioned on this page. Please note that our prices are fixed (do not bargain).

After making payment, solution is available instantly.Solution is available either in Word or Excel format unless otherwise specified.

If your question is slightly different from the above question, please contact us at info@myassignmentguru.com with your version of question.