ABC Ltd in Queensland acquired XYZ Ltd in Victoria. Specifically, on 1 July 2022, ABC Ltd acquired all the issued shares of XYZ Ltd for $180 000. The financial statements of XYZ Ltd showed the equity of XYZ Ltd at that date to be: Share capital $100000 General reserve $50000 Retained earnings $30000 All the assets and liabilities of XYZ Ltd were recorded at amounts equal to their fair values at that date. During the year ending 30 June 2023, XYZ Ltd undertook the following action. On 1 January 2023, transferred $10 000 from retained earnings existing at 1 July 2022 to the general reserve. Required Prepare the pre-acquisition entries at 1 July 2022. Prepare the pre-acquisition entries at 30 June 2023.
ABC Ltd in Queensland acquired XYZ Ltd in Victoria. Specifically, on 1 July 2022, ABC Ltd acquired all the issued shares of XYZ Ltd for $180 000. The financial statements of XYZ Ltd showed the equity of XYZ Ltd at that date to be: Share capital $100000 General reserve $50000 Retained earnings $30000 All the assets and liabilities of XYZ Ltd were recorded at amounts equal to their fair values at that date. During the year ending 30 June 2023, XYZ Ltd undertook the following action. On 1 January 2023, transferred $10 000 from retained earnings existing at 1 July 2022 to the general reserve. Required Prepare the pre-acquisition entries at 1 July 2022. Prepare the pre-acquisition entries at 30 June 2023.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 24E
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ABC Ltd in Queensland acquired XYZ Ltd in Victoria. Specifically, on 1 July 2022, ABC Ltd acquired all the issued shares of XYZ Ltd for $180 000. The financial statements of XYZ Ltd showed the equity of XYZ Ltd at that date to be:
Share capital $100000
General reserve $50000
All the assets and liabilities of XYZ Ltd were recorded at amounts equal to their fair values at that date.
During the year ending 30 June 2023, XYZ Ltd undertook the following action.
On 1 January 2023, transferred $10 000 from retained earnings existing at 1 July 2022 to the general reserve.
Required
Prepare the pre-acquisition entries at 1 July 2022.
Prepare the pre-acquisition entries at 30 June 2023.
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