On 1 July 2021 Honey Ltd acquired the following assets and liabilities from BearLtd:Carrying amountFair valueLand$350,000$350,000Equipment (cost $450,000)$280,000$290,000Motor Vehicles$120,000$130,000Inventory$80,000$75,000Cash$35,000$35,000Accounts payable($28,000)($28,000)Loans (non-current)($100,000)($100,000)In exchange for these assets and liabilities, Honey Ltd issued 90 000 shares thathad been issued for $4.50 per share but as at 1 July 2021 had a fair value of$6.50 per share. The issue of the shares cost $500 and the cost of theacquisition was $1,000.RequiredCalculate the goodwill /gain on bargain purchase, show your workings.Prepare the journal entries in the records of Honey Ltd to account for theacquisition of the assets and liabilities of Bear Ltd."

Calculate the goodwill /gain on bargain purchase, show your workings. Prepare the journal entries in the records of Honey Ltd to account for the acquisition of the assets and liabilities of Bear Ltd."

Calculate the goodwill /gain on bargain purchase, show your workings. Prepare the journal entries in the records of Honey Ltd to account for the acquisition of the assets and liabilities of Bear Ltd."

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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