Share capital 2,100,000 420,000 Retained earnings 420,000 588,000 3,486,000 1,386,000 Required: a.Calculate the goodwill on acquisition assuming all net assets of small Ltd are recorded in fair value. b.Prepare consolidation journal entries.
On 1 July 2020, Big Ltd acquired all the issued share capital of Small Ltd for cash for an amount of $1,050,000. On the date of the acquisition, the
|
|
Big Ltd ($) |
Small Ltd ($) |
|
Assets |
|
|
|
Cash |
21,000 |
10,500 |
|
Accounts receivable |
315,000 |
115,500 |
|
Land |
420,000 |
210,000 |
|
Plant |
1,680,000 |
1,050,000 |
|
Investment in Small Ltd |
1,050,000 |
|
|
|
3,486,000 |
1,386,000 |
|
Liabilities |
|
|
|
Accounts payable |
126,000 |
63,000 |
|
Loans payable |
840,000 |
315,000 |
|
Shareholders’ equity |
|
|
|
Share capital |
2,100,000 |
420,000 |
|
|
420,000 |
588,000 |
|
|
3,486,000 |
1,386,000 |
Required:
a.Calculate the
b.Prepare consolidation
c.
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