On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600. At this date the statement of financial position of Eldorado Ltd was as follows: Carrying amount Fair value Machinery $ 40,000 $ 67,000 Fixtures & fittings 60,0000 68,000 Vehicles 35,000 35,000 Current assets 10,000 12,000 Current liabilities (16,000) (18,000) Total net assets $ 129,000 Share capital (80,000 shares at $1.00 per share) $ 80,000 General reserve 20,000 Retained earnings 29,000 Total equity 129,000 Required: Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition.
On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600.
At this date the
|
|
Carrying amount |
Fair value |
|
Machinery |
$ 40,000 |
$ 67,000 |
|
Fixtures & fittings |
60,0000 |
68,000 |
|
Vehicles |
35,000 |
35,000 |
|
Current assets |
10,000 |
12,000 |
|
Current liabilities |
(16,000) |
(18,000) |
|
Total net assets |
$ 129,000 |
|
|
Share capital (80,000 shares at $1.00 per share) |
$ 80,000 |
|
|
General reserve |
20,000 |
|
|
|
29,000 |
|
|
Total equity |
129,000 |
|
Required:
Prepare the
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