(Done Paper) Referencing Styles : Harvard Question 1 (15 marks)Business combination valuation entries, pre-acquisition entriesOn 1 July 2016, Merelyn Ltd acquir

//(Done Paper) Referencing Styles : Harvard Question 1 (15 marks)Business combination valuation entries, pre-acquisition entriesOn 1 July 2016, Merelyn Ltd acquir

(Done Paper) Referencing Styles : Harvard Question 1 (15 marks)Business combination valuation entries, pre-acquisition entriesOn 1 July 2016, Merelyn Ltd acquir

Referencing Styles : Harvard Question 1 (15 marks)Business combination valuation entries, pre-acquisition entriesOn 1 July 2016, Merelyn Ltd acquired all the issued shares of Cathy Ltd for $220 800. At this date theequity of Cathy Ltd consisted of share capital of $100 000 and retained earnings of $58 800. All theidentifiable assets and liabilities of Cathy Ltd were recorded at amounts equal to fair value except for: Carrying amoun … View More Question 1 (15 marks) Business combination valuation entries, pre-acquisition entries On 1 July 2016, Merelyn Ltd acquired all the issued shares of Cathy Ltd for $220 800. At this date the equity of Cathy Ltd consisted of share capital of $100 000 and retained earnings of $58 800. All the identifiable assets and liabilities of Cathy Ltd were recorded at amounts equal to fair value except for: Carrying amount Fair value Patent $70 000 $72 000 Plant (net of $40 000 depreciation) 40 000 60 000 Inventory 21 600 28 000 The patent was considered to have an indefinite life. It was calculated that the plant had a further life of 10 years, and was depreciated on a straight-line basis. All the inventory was sold by 30 June 2017. In June 2017, Cathy Ltd conducted an impairment test on the patent, as it was considered to have an indefinite life, and the goodwill. As a result, the goodwill was considered to be impaired by $1300. In May 2017, Cathy Ltd transferred $30 000 from the retained earnings on hand at 1 July 2016 to a general reserve. The tax rate is 30%. Required Prepare the consolidation worksheet adjustments entries at 1 July 2016 and 30 June 2017. Question 2 (15 marks) A junior accounts clerk has prepared the following summarised information as at 30 June 2016 for Heaven Ltd: Assets Inventories (at lower of cost and net realisable value) Accounts receivable Cash Land and buildings Plant and equipment Prepayments Calls in arrears (2500 shares at 20c) Patents — cost $ 970 000 651 020 1 598 080 1 750 000 1 716 000 3 400 500 100 000 $6 789 000 Read Less

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By | 2018-08-02T20:41:58+00:00 August 2nd, 2018|Business|0 Comments

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