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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