into Ltd obtained control of Suda ltd by acquiring 80% of the issued share capital of Suda ltd at 1 January 2015. The consideration is to be settled as follows: · A cash payment of R1 000 000 · The fair value of machine is R500 000 is recorded in Tinto ltd · Tinto ltd will issue new shares to the seller, to the value of R600 000 Journalize the above transaction in the books of Tinto ltd.
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Tinto Ltd obtained control of Suda ltd by acquiring 80% of the issued share capital of Suda ltd at 1 January 2015. The consideration is to be settled as follows:
· A cash payment of R1 000 000
· The fair value of machine is R500 000 is recorded in Tinto ltd
· Tinto ltd will issue new shares to the seller, to the value of R600 000
Journalize the above transaction in the books of Tinto ltd.
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- Hlayisani Ltd acquired 60% of the voting shares of the Mashele Ltd on 31 January 2014 for R65 000 when the items ofequity in the books of Mashele Ltd on that date were retained income of R45 000, revaluation surplus of R10 000 andshare capital of R58 000. What is the relationship between Hlayisani Ltd and Mashele Ltd? Select one: a. Venturer and joint venture. b. Investor and associate. c. Parent and subsidiary. d. Venturer and joint operation.DDaniel Ltd purchased 75 per cent of the issued capital and in the process gained control over Riccardo Ltd on 1 July 2020. The fair value of the net assets of Riccardo Ltd at purchase was represented by: Share Capital $3,760,000 Retained Earnings 1,320,000 Daniel Ltd paid cash consideration of $4 000 000 for Riccardo Ltd. During the period ended 30 June 2021, Riccardo Ltd paid management fees of $540 000 to Daniel Ltd and Riccardo Ltd had an operating profit of $980 000. Riccardo Ltd's opening retained earnings at the beginning of the period were $1 460 000. At the end of the period Riccardo Ltd declared a dividend of $90 000. There were no other inter-company transactions. Goodwill was determined to have been impaired by $19 000 during the period. Companies in the group accrue dividends when they are declared by subsidiaries.For the period ended 30 June 2021, what consolidation journal entries are required and what is the non-controlling interest?Daniel Ltd purchased 75 per cent of the issued capital and in the process gained control over Riccardo Ltd on 1 July 2020. The fair value of the net assets of Riccardo Ltd at purchase was represented by: Share Capital $3,760,000 Retained Earnings 1,320,000 Daniel Ltd paid cash consideration of $4 000 000 for Riccardo Ltd. During the period ended 30 June 2021, Riccardo Ltd paid management fees of $540 000 to Daniel Ltd and Riccardo Ltd had an operating profit of $980 000. Riccardo Ltd's opening retained earnings at the beginning of the period were $1 460 000. At the end of the period Riccardo Ltd declared a dividend of $90 000. There were no other inter-company transactions. Goodwill was determined to have been impaired by $19 000 during the period. Companies in the group accrue dividends when they are declared by subsidiaries.For the period ended 30 June 2021, what consolidation journal entries are required and what is the non-controlling interest?
- On 1 July 2015, Monageng Limited concluded an agreement to purchase 75% of the ordinary shares in Selongo Limited. The terms of the purchase agreement include, among other things, the following: Monageng Limited will settle for the 75% of the ordinary shares by paying cash of R200 000 in addition to issuing 100 000 of its own 10% preference shares to the owners of the 75% ordinary shares on 30 September 2015. The price of the10% preference shares on 30 September 2015 was R2.50 each. Monageng Limited will only be able to appoint its directors to the board of Selongo Limited on 1 August 2015 after the year end date of Selongo Limited which is on 31 July 2015. All the ordinary shares of Selongo Limited are entitled to vote at the company’s AGM but preference shares are not entitled to vote. What is the acquisition date of this business combination? Select one: a. 1 July 2015 b. 30 September 2015 c. 1 August 2015 d. 1 October 2015On 1 July 2015, Monageng Limited concluded an agreement to purchase 75% of the ordinary shares in Selongo Limited.The terms of the purchase agreement include, among other things, the following• Monageng Limited will settle for the 75% of the ordinary shares by paying cash of R200 000 in addition to issuing 100000 of its own 10% preference shares to the owners of the 75% ordinary shares on 30 September 2015. The price ofthe10% preference shares on 30 September 2015 was R2.50 each.• Monageng Limited will only be able to appoint its directors to the board of Selongo Limited on 1 August 2015 after theyear end date of Selongo Limited which is on 31 July 2015. All the ordinary shares of Selongo Limited are entitled to voteat the company’s AGM but preference shares are not entitled to vote.Which of the following statements are true?(i) Monageng Limited is the acquiree(ii) Selongo Limited is the acquiree(iii) Monageng Limited is the acquirer(iv) Selongo Limited is the acquirerSelect one:a.(i)…On 1 June 2013, Sun Ltd acquired 75% interest (and control) over Savy Ltd by acquiring 570 000 of the issued ordinary shares of Savy Ltd. The consideration paid was settled in cash amounting to R810 000. On this date the retained earnings of Savy Ltd amounted to R125 000 and 760 000 ordinary shares worth R950 000. The Sun Ltd Group measures non-controlling interests in an acquiree at its proportional share of the aquiree’s identifiable net assets at acquisition date (partial goodwill method). Calculate the amount of goodwill. Select one: a. R3 750 b. R2 000 c. RNIL d. R272 500
- Hlayisani Ltd acquired 60% of the voting shares of the Mashele Ltd on 31 January 2014 for R65 000 when the items ofequity in the books of Mashele Ltd on that date were retained income of R45 000, revaluation surplus of R10 000 andshare capital of R58 000. Calculate the portion of minority shareholders if any.Select one:a.R45 200b.R27 200c.R67 800d.R41 200On June 30, 2016, Gab Company purchased 25% of the outstanding ordinary shares of IB Co. at a total cost of P2,100,000. The book value of IB Co.’s net assets on acquisition date was P7,200,000. For the following reasons, Gab was willing to pay more than book value for the IB Co. shares: IB Co. has depreciable assets with a current fair value of P180,000 more than their book value. These assets have a remaining useful life of 10 years. IB Co. owns a tract of land with a current fair value of P900,000 more than its carrying amount. All other identifiable tangible and intangible assets of IB Co. have current fair values that are equal to their carrying amounts. IB Co. reported net income of P1,620,000, earned evenly during the current year ended December 31, 2016. Also in the current year, it declared and paid cash dividends of P315,000 to its ordinary shareholders. Market value of IB Co.’s ordinary shares at December 31, 2016 is P9 million. Cabbage Company’s financial year-end is…On June 30, 2016, Gab Company purchased 25% of the outstanding ordinary shares of IB Co. at a total cost of P2,100,000. The book value of IB Co.’s net assets on acquisition date was P7,200,000. For the following reasons, Gab was willing to pay more than book value for the IB Co. shares: IB Co. has depreciable assets with a current fair value of P180,000 more than their book value. These assets have a remaining useful life of 10 years. IB Co. owns a tract of land with a current fair value of P900,000 more than its carrying amount. All other identifiable tangible and intangible assets of IB Co. have current fair values that are equal to their carrying amounts. IB Co. reported net income of P1,620,000, earned evenly during the current year ended December 31, 2016. Also in the current year, it declared and paid cash dividends of P315,000 to its ordinary shareholders. Market value of IB Co.’s ordinary shares at December 31, 2016 is P9 million. Cabbage Company’s financial year-end is…
- Taylor Ltd, a supplier of music records and equipment, agreed to acquire the business of a rival company, Speedy Ltd, taking over all assets and liabilities as at 1 June 2020. The price agreed on was $175,000, payable $150,000 in cash and the balance by the issue to the selling company of 25,000fully paid shares in Taylor Ltd, these shares having a fair value of $1.00 per share. The trial balances of the two companies as at 1 June 2020 were as follows. Taylor Speedy Dr Cr Dr Cr Share capital 1,200,000 300,000 Retained earnings 420,000 184,000 Accounts payable 97,000 325,000 Cash 275,000 Equipment (net) 468,000 230,000 Inventory 415,000 122,000 Accounts receivable 309,000…Trifles Ltd acquired 280,000 shares in Bamburg Ltd on 01 July 2019 and as a result Trifles Ltd has a control of 80% in Bamburg. The purchased consideration transferred by Trifles Ltd in exchange of the shares in Bamburg Ltd was as follows:(i) Cash paid of $ 565,000(ii) Cash to be paid in four year time is $ 500,000(iii) Share exchange of two shares in Trifles Ltd for every seven shares in Bamburg Ltd. The market price of Trifles Ltd at the date of acquisition was $ 3. The par value of Trifles Ltd’ ordinary shares is $ 0.5 each.Legal fees associated with the acquisition were $ 75,000.The cost of capital of Trifles Ltd is 15%. Assume that Trifles Ltd has only recorded the cash transaction of $ 565,000. Prepare the consolidated Statement of Financial Position (Equity and Liabilities section only) to show how the deferred consideration and the share exchange should be accounted for the year ended 30 June 2020.Maenetja Limited acquired 1000 shares in Manana Limited on 1 December 2014 at the fair value of R15 per share. Transaction costs amounted to R200. At the date of acquisition the company elected to recognize subsequent changes in the fair value of this investment in other comprehensive income (OCI). The company’s policy is to release any gains or losses resulting from these fair value adjustments to retained earnings when the shares are sold. On 31 December 2014 the market value of Manana Limited’s shares was R18. On 30 June 2015, 200 shares were sold for R19.50. The market value of the shares at 31 December 2015 was R14. What amount should be recorded as the closing amount on this investment