P Limited obtained control with the acquisition of an 80% equity interest in the share capital of S Limited on 1 January20.9 and paid R140 000 cash to the sellers of the shares (previous shareholder(s)) to settle the purchase price. At acquisition date the equity of S Limited consisted of the following: Share capital (100 000 shares) R100 000 Retained earnings R50 000 What amount would be recognized as Goodwill in proforma consolidation journals of P Ltd? Select one: a. R20 000 b. R30 000 c. R50 000 d. R10 000

P Limited obtained control with the acquisition of an 80% equity interest in the share capital of S Limited on 1 January20.9 and paid R140 000 cash to the sellers of the shares (previous shareholder(s)) to settle the purchase price. At acquisition date the equity of S Limited consisted of the following: Share capital (100 000 shares) R100 000 Retained earnings R50 000 What amount would be recognized as Goodwill in proforma consolidation journals of P Ltd? Select one: a. R20 000 b. R30 000 c. R50 000 d. R10 000

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter7: Corporations: Reorganizations

Section: Chapter Questions

Problem 43P

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Donut Inc. issued 20,000 common shares in exchange for all the outstanding shares of Munchkin Inc. On acquisition date, Munchkin Inc.’s net identifiable assets have carrying amount of P4,000,000 and fair value of P2,000,000. The transaction increased Donut Inc.’s share premium by P400,000; however, no goodwill resulted from the business combination. How much is the acquisition-date fair value per share of the common shares issued by Donut Inc.?* a. P 100 b. P 20 c. P 40 d. P 80
P Limited obtained control with the acquisition of an 80% equity interest in the share capital of S Limited on 1 January 20.9 and paid R100 000 cash and transferred 10 000 ordinary equity shares in W Limited, with a market value of R4 per share, to settle the purchase price of R140 000 for the acquisition of an 80% interest.Identify the correct journal entries to be made in the separate accounting records of P Ltd Select one: a. Dr Investment in S Ltd R140 000 ,Cr Bank R100 000 Cr Investment in W Ltd R40 000 b. Dr Investment in S Ltd R140 000, Dr Investment in W Ltd R40 00, Cr Bank R180 000 c. Dr Investment in S Ltd R110 00 ,Cr Bank R11 000 d. Dr Investment in S Ltd R140 000, Cr Bank R140 000
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