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Business combination valuation entries, pre-acquisition entries

Business combination valuation entries, pre-acquisition entries   On 1 July 2016, Merelyn Ltd acquired all the issued shares of Cathy Ltd for $220 800. At this date the equity of Cathy Ltd consisted of share capital of $100 000 and retained earnings of $58 800. All the identifiable assets and liabilities of Cathy Ltd were recorded at amounts equal to fair value except for:                                                               Carrying amount                    Fair value Patent                                                  $70 000                                               $72 000 Plant (net of $40 000 depreciation)    40 000                                     60 000 Inventory                                            21 600                                     28 000      The patent was considered to have an indefinite life. It was calculated that the plant had a further life of 10 years, and was depreciated on a…

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The following transactions occurred for McDonalds Ltd

CHARLES DARWIN …UNIVERSITY Part A: 1 Question Question 1 (80 Marks) McDonalds Limited Balance Sheet as at 1 July 2015 Assets Liabilities Current Assets Current Liabilities Cash 43900 Accounts Payable 28600 Accounts Receivable 27800 Accrues salaries 7100 Inventory 17500 Total current liabilities 35700 Prepaid Rent 6000 Total Current Assets 95200 Non-current liabilities Long term loan 75000 Total Liabilities 110700 Non-Current Assets Plant and Equipment 275000 Shareholder’s equity Accumulated depreciation -65000 Share capital 150000 Investment 20000 Retained profits 64500 Total non-current assets 230000 Total shareholder’s equity 214500 Total Assets 325200 Total Liabilities and shareholder’s equity 325200   The following transactions occurred for McDonalds Ltd for the year ending 30 June 2016: Issued additional share capital for $5000 cash Received $26 800 from…

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