On 1 July 2019 Alma Ltd acquired 94% the issued shares of Davis Ltd for $3716000 . The equity of Davis Ltd at this date consisted of: | ||||||||||||
Share capital | 1301000 | |||||||||||
Asset revaluation surpluss | 557000 | |||||||||||
Retained earnings | 446000 | |||||||||||
All the identifiable assets and liabilities of Davis Ltd were recorded at amounts equal to their fair values at acquisition date except for the following; | ||||||||||||
Account | Cost | Carrying Amount | Fair value | Further life- in Year | ||||||||
Inventories | $557,000 | $1,003,000 | ||||||||||
Land | $1,115,000 | $2,007,000 | ||||||||||
Machinery | $1,562,000 | $1,301,000 | $2,342,000 | 8 | ||||||||
Fittings | $20,000 | $20,000 | 8 | |||||||||
Liabilities | $50,000 | $50,000 | ||||||||||
All inventories on hand at 1 July 2019 are sold by 30 June 2020. Further life of the assets are listed on the above table. Alma Ltd uses the partial goodwill method. | ||||||||||||
Tax rate:30% | ||||||||||||
Required | ||||||||||||
1- Prepare the acquisition analysis at acquisition date. | ||||||||||||
2- Prepare the business combination valuation entries and pre-acquisition entry at acquisition date. | ||||||||||||
3- Prepare the journal entry to recognise NCI at acquisition date. | ||||||||||||
4-Prepare the consolidation worksheet entries at 30 June 2020. Assume a profit for Davis Ltd for the year ended 30 June 2020 of $74000. |
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