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B. Fizers Bhd acquired 80% interest in Zeneca Bhd on 1 June 2019 for RM40,500,000. On this date, the ordinary shares of Zeneca Bhd was RM35,000,000 and the retained profit was RM10,000,000. On 1 January 2020, Zeneca Bhd acquired a 70% interest in Senovac Bhd for RM25,000,000. The retained profit and ordinary shares of Senovac Bhd on this date were RM5,000,000 and RM20,000,000 respectively. It is the group’s policy to value non-controlling interest at their proportionate share of their fair values of the net assets of the subsidiaries on the dates of acquisitions.
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- On May 1, 2020, Clarke Inc. acquired 1,250 shares of Mayson Ltd. for $75,000. This investment represents a 16% interest in Mayson Ltd. Clarke Inc. has classified this investment as FVTOCI. On December 31, 2020, Mayson Ltd paid a $35,000 dividend to its shareholders. On April 30, 2021, Mayson Ltd's shares were valued at $30 per share, and Mayson Ltd. reported a net loss of $27,000 for the year. On June 15, 2021, Clarke Inc sold the shares for $37,000. Both Clarke Inc and Mayson Ltd have April 30, 2021, year-ends. Required: Prepare dated journal entries for the investment on the acquiring company's books from acquisition to disposal. Ignore income taxes. Journal entry descriptions are optional.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.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%. a) Calculate the fair value of the consideration to acquire control of Bamburg Ltd at the acquisition date.
- 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%.a) Calculate the fair value of the consideration to acquire control of Bamburg Ltd at the acquisition date. Your answer should include a brief explanation if any of the above issue(s) is/are not required to be accounted in your working(s).Grouper Inc. acquired 10% of the outstanding common shares of Gregson Inc. on December 31, 2019. The purchase price was $904,000 for 45,200 shares, and is equal to 10% of Gregson’s carrying amount. Gregson declared and paid a $0.80 per share cash dividend on June 15 and again on December 15, 2020. Gregson reported net income of $516,000 for 2020. The fair value of Gregson’s shares was $24 per share at December 31, 2020. Grouper is a public company and applies IFRS. What amount is reported for the investment in Gregson shares on the December 31, 2020 statement of financial position under each of these methods in Fair Value Method and Equity Method? Fair ValueMethod Equity Method Investment $enter a dollar amount $enter a dollar amount Where is the investment reported on statement of financial position? The Investment accounts under both Fair Value Method and Equity Method are likely to be included in current assets / non-current assets /…Grouper Inc. acquired 10% of the outstanding common shares of Gregson Inc. on December 31, 2019. The purchase price was $904,000 for 45,200 shares, and is equal to 10% of Gregson’s carrying amount. Gregson declared and paid a $0.80 per share cash dividend on June 15 and again on December 15, 2020. Gregson reported net income of $516,000 for 2020. The fair value of Gregson’s shares was $24 per share at December 31, 2020. Grouper is a public company and applies IFRS. Prepare the journal entries for Grouper for 2019 and 2020, assuming that Grouper cannot exercise significant influence over Gregson. The investment is accounted for using the FV-OCI model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit choose a transaction date…
- Trifles Ltd acquired 280,000 shares in Bamburg Ltd on 01 July 2019 and as a resultTrifles Ltd has a control of 80% in Bamburg. The purchased consideration transferredby Trifles Ltd in exchange of the shares in Bamburg Ltd was as follows: (i) (ii) (iii) Cash paid of $ 565,000Cash to be paid in four year time is $ 500,000Share exchange of two shares in Trifles Ltd for every seven shares inBamburg 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%.a) Calculate the fair value of the consideration to acquire control of BamburgLtd at the acquisition date. Bamburg Ltd’s retained earnings at the date of acquisition was $ 135,000. Noordinary shares were issued/ redeemed by the subsidiary since acquisition. Thegroup used the proportion of the net assets of the subsidiary company tomeasure non-controlling…On 1 May 2019, PR Corp purchased 75 per cent of the equity of SS Corp for $2.6 million. The consideration was 35,000 equity shares in PR Corp with a fair value of $2.6 million. The followings are extracts from the draft (not finalised) statements of profit or loss for PR Corp and its subsidiary SS Corp for the year ending 30 June 2019 together with the draft statements of financial position as at 30 June 2019. The profits of SS Corp have been earned evenly throughout the year 2019. Statements of profit or loss for the year ending 30 June 2019 PR Corp ($000) SS Corp ($000) Gross profit 1,456 960 Profit for the year 920 384 Statements of financial position as at 30 June 2019 PR Corp ($000) SS Corp ($000) Share capital 2,800 740 Retained earnings 11,600 1,324 Revaluation surplus 120 - 14,520 2,064 PR Corp has not yet accounted for the issue of its own…On 1 July 2019, SydMel Ltd acquired 80% of the issued shares of Sydney Ltd for $165 000. At this date, the equity of Lee Ltd was: Share capital $100 000 General reserve 40 000 Retained earnings 50 000 At acquisition date all the identifiable assets and liabilities of Sydney Ltd were recorded at amounts equal to fair value. At 30 June 2021, the equity of Sydney Ltd consisted of: Share capital $100 000 General reserve 50 000 Retained earnings 80 000 During the 2020–21-year Sydney Ltd recorded a profit of $15 000. Required: Prepare the consolidated worksheet entries at 30 June 2021 for SydMel Ltd assuming: At 1 July 2019, the fair value of the non-controlling interest was $39 000 and SydMel Ltd adopts the full goodwill method. SydMel Ltd adopts the partial goodwill method.
- Unicorn Ltd acquired 80% of the issued shares of Pegasus Ltd for $685,700 on 1 July 2020. The financial statements of Pegasus Ltd showed the following items of equity: Share capital $565,500 Retained earnings $247,400 At acquisition date all the identificable assets and liabilities of Pegasus Ltd were recorded at amounts equal to fair value except for the following: Carrying amount Fair value Land $395,900 $424,100 During the year end 30 June 2021, Pegasus Ltd recorded at profit of $84,800. The tax rate is 30%. Required: Show the acquisition analysis as at 1 July 2020 and prepare the consolidated worksheet entries at 30 June 2021 for Unicorn Ltd assuming that it adopts the partial goodwill method.On January 1, 2020, Chico Company purchased 10% of Winona Company’s outstanding ordinary shares for P200,000. Chico Company is the largest single shareholder in Winona Company and the officers of Chico Company are the majority members of Winona Company’s board of directors. Winona Company reported a profit of P1,500,000 for 2020 and paid dividends of P900,000. The market value of Winona Company’s ordinary shares on December 31, 2020, is P265,000. In its December 31, 2020, statement of financial position, what amount should Chico Company report as an investment in Winona Company?On January 1, 2020, Santos Ltd. purchased 30% of Yardley Co.’s 50,000 outstanding common shares at a price of $20 per share. This price is based on Yardley’s net assets. On June 30, Yardley declared and paid a cash dividend of $60,000. On December 31, 2020, Yardley reported net income of $120,000 for the year. At this time, the shares had a fair value of $23. Santos’s year-end is December 31. Required: a. Assuming that Santos does not have any significant influence over Yarder, prepare all the 2020 entries relating to this investment using the FVTPL classification. b. Prepare all the 2020 entries relating to this investment if it was classified as cost due to no active markets. c. Prepare all the 2020 entries relating to this investment assuming that Santos has significant influence over Yarder. Santos uses the equity method of accounting.
