Tinto Ltd obtained control of Suda ltd by acquiring 80% of the issued share capital of Suda ltd at 1 January 2015. The consideration is to be settled as follows: · A cash payment of R1 000 000 · The fair value of machine is R500 000 is recorded in Tinto ltd · Tinto ltd will issue new shares to the seller, to the value of R600 000
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Question 5
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Tinto Ltd obtained control of Suda ltd by acquiring 80% of the issued share capital of Suda ltd at 1 January 2015. The consideration is to be settled as follows: · A cash payment of R1 000 000 · The fair value of machine is R500 000 is recorded in Tinto ltd · Tinto ltd will issue new shares to the seller, to the value of R600 000 |
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Journalize the above transaction in the books of Tinto ltd.
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- Q5 Tinto Ltd obtained control of Suda ltd by acquiring 80% of the issued share capital of Suda ltd at 1 January 2015. The consideration is to be settled as follows: · A cash payment of R1 000 000 · The fair value of machine is R500 000 is recorded in Tinto ltd · Tinto ltd will issue new shares to the seller, to the value of R600 000 Journalize the above transaction in the books of Tinto ltd.que 5 Tinto Ltd obtained control of Suda ltd by acquiring 80% of the issued share capital of Suda ltd at 1 January 2015. The consideration is to be settled as follows: · A cash payment of R1 000 000 · The fair value of machine is R500 000 is recorded in Tinto ltd · Tinto ltd will issue new shares to the seller, to the value of R600 000 Journalize the above transaction in the books of Tinto ltd.Q2 Maenetja Limited acquired 1000 shares in Manana Limited on 1 December 2014 at the fair value of R15 per share. Transaction costs amounted to R200. At the date of acquisition the company elected to recognize subsequent changes in the fair value of this investment in other comprehensive income (OCI). The company’s policy is to release any gains or losses resulting from these fair value adjustments to retained earnings when the shares are sold. On 31 December 2014 the market value of Manana Limited’s shares was R18. On 30 June 2015, 200 shares were sold for R19.50. The market value of the shares at 31 December 2015 was R14. What are the correct journal entries that should be recorded initially when the shares purchased on 1 December 2014? Select one: a. DR Investment R15 000DR Transaction costs R200 CR Bank/Liability R15 200 b. DR Investment R15 000…
- Question 6 Week 12 On 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of Jamuna Ltd for a cash consideration of $360 000.At the date of acquisition, the shareholders’ equity of Jamuna Ltd is:Share capital $450 000Retained earnings $300 000Total shareholders’ equity 750 000Additional information• On the date of acquisition, buildings have a carrying amount in the accounts of Jamuna Ltd of $240 000 and amarket value of $300 000. The buildings have an estimated useful life of 10 years after 1 July 2014.• For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90 000, from which it pays adividend of $30 000.• For the year ending 30 June 2016 Jamuna Ltd records an after-tax profit of $300 000, from which it pays adividend of $150 000.• Assume a tax rate of 30% is assumedRequiredApply equity method of accounting to:(a) Calculate the amount of goodwill at the date of acquisition (b) Prepare the journal entries for the year ending 30 June 2015 (c) Prepare…Question 10 On January 2, 2020, Tuao Company purchased 10% of Abulug Company’s outstanding ordinary shares for P20,000,000. Tuao is the largest single shareholder in Abulug and this gives Tuao the power to participate in the financial and operating policy decisions of the Abulug but is not control or joint control over those policies. Abulug reported profit of P10,000,000 and paid dividend of P4,000,000. What should be the balance in Tuao’s investment in Abulug Company at the end of 2020? Group of answer choices P20,600,000 P21,000,000 P20,000,000 P21,400,000Question 1 Ewig Berhad acquired 800, 000 out of the 1, 000, 000 RM1 ordinary shares of Leben Berhad on 1 January 2020 for RM900, 000 cash. The general reserves and retained earnings of Leben Berhad at the date of acquisition were RM400, 000 and RM250, 000 respectively. Required: (a) What is the percentage of acquisition by Ewig Berhad? (b) What is the corporate relationship in this situation? (c) Based on MFRS 10, briefly explain whether Ewig Berhad exercises control over Leben Berhad. (d) Assuming the proportional net asset method is used, what is the fair value of the NCI? (e) What is the goodwill or bargain purchase?
- Question 1Pitaya Ltd has acquired 45% of ordinary shares in Santol Ltd. Another investor has a 10% shareholding in Santal Ltd whilst the remaining voting rights are held by thousands of shareholders, none of whom individually hold more than 1% of the voting rights. Pitaya Ltd holds convertible debt instrument that, as at 30 June 2022, are convertible into ordinary shares of Santol Ltd at a price of $ 10 per share. At 30 June 2022, the shares of Santol Ltd trade at $ 9.80 per share. Pitaya Ltd would hold 65% of the voting rights in Santol Ltd if Pitaya Ltd exercise its right to convert the debt. Both companies operate in Santolindustries and would benefit from synergies. Discuss how Pitaya Ltd’s investment in the ordinary shares of Santol Ltd should be treated in the consolidated financial statements for the year ended 30 June 2022.C4) Helta Ltd acquired 100% of the share capital of Buzz Ltd on 1 January 2021. On that date, Helta Ltd began implementing a major change in the nature of Buzz Ltd’s trade. The trading profits/(losses) of each company for the two years ended 31 March 2021 are: Buzz Ltd Helta Ltd ££ Year ended 31 March 2020 80,000 20,000 Year ended 31 March 2021 100,00 20,000 The profits and losses are generated evenly throughout these periods. Neither company has any other income or gains, nor any other associated companies. Required: State, with supporting calculations, how relief is obtained for Buzz Ltd’s loss of £100,000, on the basis that the companies claim relief for losses as soon as possible.Question: Trifles Ltd acquired 280,000 shares in Bamburg Ltd on 01 July (1 bookmark) 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: (1) Cash paid of $ 565,000 (m) Cash to be paid in four year time is $ 500,000 () 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% b) 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…
- Q2 Petro Ltd acquired 60% of Carlos Ltd’s 500,000 R1 equity shares on 1st January 2019 for a consideration of R5 cash per share. At the date of acquisition, net assets and liabilities in Carlos Ltd were valued at R1,600,000 and the fair value of the non-controlling interest was R800,000. Required: 1. Determine the acquisition date. 2. Calculate goodwill or gain on bargain purchase if any using Proportionate of Net Assets Method 3. Calculate goodwill or gain on bargain purchase if any using Fair Value MethodQuestion 14 Last year Ryland acquired a 15% investment in Susan for GHS10,000 and that remains carried at cost in Ryland accounts. This investment now has a fair value of GHS30,000. Ryland has just made a further acquisition of 40% of the shares in Susan for GHS100,000. The net assets of Susan have now been determined at GHS60,000 and the fair value of the NCI at GHS80,000. Ryland has a policy of valuing the NCI at fair value at the date of acquisition. Required: Calculate the goodwill arising on the acquisition of Susan. Question 15 Truran, the parent, owns 80% of a subsidiary and the NCI in the subsidiary is currently measured at GHS100,000. Truran, the parent has just acquired all the remaining shares paying GHS90,000. Truran, the parent has acquired 5% of the shares reducing the NCI to 15% paying GHS80,000. Required: Calculate the difference arising that will be taken to equity in both situations.PROBLEM 35At the beginning of 2018, Esterlina Corporation purchased 40% of the ordinary shares outstanding of Mary Grace Incorporated for P15,000,000 when the net assets of Mary Grace Incorporated amounted to P30,000,000. At the acquisition date, the carrying amounts of the identifiable assets and liabilities of Mary Grace Incorporated were equal to their fair value, except for the following: a. Equipment whose fair value was P7,000,000 greater than its carrying amount.b. Inventory whose fair value was P2,500,000 greater than its carrying amount. The equipment has a remaining life of 4 years, and the inventory was all sold during 2013. Mary Grace Incorporated has two classes of shares: Ordinary shares (par value, P100), 300,000 shares outstanding, 15% cumulative preference shares (par value, P50), 100,000 shares outstanding. The investee reported the following net income (inclusive of enter-company transactions) and payment of cash dividend: 2018…
