On 1 July 2019, Brad Ltd acquired all of the assets and liabilities of Pitt Ltd. In exchange for these assets and liabilities, Brad Ltd issued 100 000 shares that at date of issue had a fair value of $5.20 per share. Costs of issuing these shares amounted to $1000. Legal costs associated with the acquisition of Pitt Ltd amounted to $1200. The asset and liabilities of Pitt Ltd at 1 July 2019 were as follows: Carrying amount Fair value Assets $ 2000 $ 2000 10000 Cash Accounts receivable 10000 Inventories 64 000 68 000 Equipment Accumulated depreciation – equipment 320000 232 000 (96 000) 240000 Patents 280 000 Liabilities Accounts payable (16000) (64 000) (16000) (64 000) Debentures
On 1 July 2019, Brad Ltd acquired all of the assets and liabilities of Pitt Ltd. In exchange for these assets and liabilities, Brad Ltd issued 100 000 shares that at date of issue had a fair value of $5.20 per share. Costs of issuing these shares amounted to $1000. Legal costs associated with the acquisition of Pitt Ltd amounted to $1200. The asset and liabilities of Pitt Ltd at 1 July 2019 were as follows: Carrying amount Fair value Assets $ 2000 $ 2000 10000 Cash Accounts receivable 10000 Inventories 64 000 68 000 Equipment Accumulated depreciation – equipment 320000 232 000 (96 000) 240000 Patents 280 000 Liabilities Accounts payable (16000) (64 000) (16000) (64 000) Debentures
Chapter6: Corporations: Redemptions And Liquidations
Section: Chapter Questions
Problem 33CE
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Transcribed Image Text:On 1 July 2019, Brad Ltd acquired all of the assets and liabilities
of Pitt Ltd. In exchange for these assets and liabilities, Brad Ltd
issued 100 000 shares that at date of issue had a fair value of
$5.20 per share. Costs of issuing these shares amounted to $1000.
Legal costs associated with the acquisition of Pitt Ltd amounted
to $1200.
The asset and liabilities of Pitt Ltd at 1 July 2019 were as follows:
Carrying amount
Fair value
Assets
$ 2000
$ 2000
Cash
Accounts receivable
10000
10000
Inventories
64 000
68 000
Equipment
320000
232 000
Accumulated depreciation – equipment
Patents
(96 000)
240 000
280 000
Liabilities
Accounts payable
(16000)
(64 000)
(16000)
(64 000)
Debentures
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