On January 1 2013 Pyxis Ltd acquired all the share
On January 1, 2013, Pyxis Ltd. acquired all the share capital of Gemini Ltd. for $218,500. At this date, Gemini’s equity comprised:
Share capital—100,000 shares .....$100,000
Retained earnings........... 86,000
All Gemini’s identifiable assets and liabilities were recorded at fair value as at January 1, 2013, except for the following:
The equipment is expected to have a further 10-year life. All the inventory was sold by December 31, 2013. The tax rate is 40%.
Prepare the acquisition analysis and calculate the fair value adjustments for the preparation of consolidated financial statements for Pyxis and its subsidiary Gemini as at:
(a) January 1, 2013.
(b) December 31, 2013.
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