Question - Adam Ltd acquires all the share capital of Luke Ltd for 5290.000. The equities of Luke Ltd at the date of acquisition were as follows:
Share Capital $150,000
General Reserve $30,000
Retained Earnings $60,000
Goodwill $10,000
All assets and liabilities of Luke Ltd were of fair value at DOA except the land had the fair value of $160,000. The carrying amount of the land is recorded at $140,000.
Provide the workings of necessary worksheet consolidation entries (no marks given) and complete the worksheet below.
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Aden Ltd
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It Ltd
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Adj. Dr.
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Adj. Cr.
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Group
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Income
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$50,000
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$34,000
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|
|
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Other income
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$14,000
|
312.000
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Expenses
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$21,000
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315.000
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|
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Income tax expense
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$8,000
|
58.000
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Profit for the period
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$35.000
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525.000
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Retained earnings (117115)
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$90.000
|
580.000
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|
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Transfer from general reserve
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$0
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$0
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|
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Retained earnmas (3041151
|
$125,000
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$105,000
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|
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Share capital
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$558,000
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$150,000
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General reserve
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$92,000
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$30,000
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FairValue Adjustment
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|
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Provisions
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$30,000
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$30,000
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Payables
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315,000
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$25,000
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Deferred tax liability
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|
|
|
|
|
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Loans
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$50,000
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$110,000
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Total equities and &babes
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$970,000
|
$450,000
|
|
|
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Plant
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$600,000
|
$820,000
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|
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Accumulated depreciation
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$295,000
|
-$550,000
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|
|
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Factures
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$300,000
|
$120.000
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|
|
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Accumulated depredation
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$180,000
|
$80,000
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Land
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$200,000
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$140,000
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|
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Brands
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$50,000
|
$30,000
|
|
|
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Shares in Luke Ltd
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$230,000
|
|
|
|
|
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Inventory
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$45,000
|
$40,000
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|
|
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Cash
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$5,000
|
$7,000
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|
|
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Receivables
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$15,000
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$13,000
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Deferred tax asset
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|
|
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| Goodwill |
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$10,000 |
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| Total assest |
$970,000 |
$450,000 |
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