Question

Retic Ltd. acquired 100% of the share capital of Dorado Ltd. for $102,000 on January 1, 2011, when the equity of Dorado consisted of:
Share capital—50,000 shares........ $50,000
Retained earnings ............ 30,000
All of Dorado’s identifiable assets and liabilities were recorded at amounts equal to fair value, except as follows:
The plant is expected to have a further useful life of five years. All the inventory on hand at January 1, 2011, was sold by December 31, 2011. The income tax rate is 40%. At December 31, 2013, the following information was obtained from both entities.
Required
(a) Prepare the consolidation process adjustments for the preparation of consolidated financial statements for Retic and its subsidiary, Dorado, as at January 1, 2011.
(b) Prepare the consolidated financial statements for Retic and its subsidiary, Dorado, as at December 31, 2013.


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  • CreatedJune 09, 2015
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