As part of a corporate expansion plan, Stavanger Ltd acquired all the share capital (cum-dividend) of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
As part of a corporate expansion plan, Stavanger Ltd acquired all the share capital (cum-dividend) of Askoy Ltd on 1 July 2018 for $138 000 cash. The statement of financial position of both companies at 30 June 2018 was as follows: Share capital Retained earnings Total equity Provisions Dividend payable Total liabilities Total equity and liabilities Cash Accounts receivables Land Plant Accumulated depreciation Total assets Stavanger Ltd Askoy Ltd 180 000 80 000 82 000 45 000 $262 000 $125 000 88 000 27 000 20 000 10 000 $108 000 $37 000 $370 000 $162 000 150 000 10 000 40 000 25 000 55 000 42 000 190 000 100 000 (65 000) (15 000) $370 000 $162 000 All identifiable assets and liabilities of Askoy Ltd were recorded at fair value as at 30 June 2018 except for the following: Land Plant (cost $100 000) Carrying amount Fair value $42 000 $45 000 $85 000 $90 000 The plant is expected to have a further useful life of 5 years. The dividend payable at 1 July 2018 was paid in October 2018. A dividend of $15 000 was declared on 30 June 2019 out of profits earned before 1 July 2018. The company tax rate is 30%. Required: (a) Complete the acquisition analysis and prepare the consolidation worksheet journal entries, the consolidation worksheet and the consolidated statement of financial position for Stavanger Ltd and its subsidiary Askoy Ltd as at 1 July 2018. (27 marks) (b) Prepare the consolidation worksheet journal entries for the preparation of consolidated financial statements for Stavanger Ltd and its subsidiary Askoy Ltd as at 30 June 2019. (8 marks) As part of a corporate expansion plan, Stavanger Ltd acquired all the share capital (cum-dividend) of Askoy Ltd on 1 July 2018 for $138 000 cash. The statement of financial position of both companies at 30 June 2018 was as follows: Share capital Retained earnings Total equity Provisions Dividend payable Total liabilities Total equity and liabilities Cash Accounts receivables Land Plant Accumulated depreciation Total assets Stavanger Ltd Askoy Ltd 180 000 80 000 82 000 45 000 $262 000 $125 000 88 000 27 000 20 000 10 000 $108 000 $37 000 $370 000 $162 000 150 000 10 000 40 000 25 000 55 000 42 000 190 000 100 000 (65 000) (15 000) $370 000 $162 000 All identifiable assets and liabilities of Askoy Ltd were recorded at fair value as at 30 June 2018 except for the following: Land Plant (cost $100 000) Carrying amount Fair value $42 000 $45 000 $85 000 $90 000 The plant is expected to have a further useful life of 5 years. The dividend payable at 1 July 2018 was paid in October 2018. A dividend of $15 000 was declared on 30 June 2019 out of profits earned before 1 July 2018. The company tax rate is 30%. Required: (a) Complete the acquisition analysis and prepare the consolidation worksheet journal entries, the consolidation worksheet and the consolidated statement of financial position for Stavanger Ltd and its subsidiary Askoy Ltd as at 1 July 2018. (27 marks) (b) Prepare the consolidation worksheet journal entries for the preparation of consolidated financial statements for Stavanger Ltd and its subsidiary Askoy Ltd as at 30 June 2019. (8 marks)
Expert Answer:
Answer rating: 100% (QA)
a Acquisition Analysis and Consolidation Worksheet Journal Entries as at 1 July 2018 Calculation of Goodwill Fair value of subsidiarys net assets Total identifiable assets Total identifiable liabiliti... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
On 1 July 2018, Joel Ltd acquired all the shares of Billy Ltd for $425 000 on an ex-div . basis. On this date, the equity and liabilities of Billy Ltd included the following balances: Share capital...
-
As part of a corporate expansion plan, Volans Ltd. acquired the shares (cum div.) of Tucana Ltd. on January 1, 2012, for $138,000 cash. The statements of nancial position of both companies at...
-
At December 31, 2017, Lebron Company distributes $50,000 of cash dividends. Its outstanding common stock has a par value of $400,000, and its 6% preferred stock has a par value of $100,000 at...
-
Two capillary tubes of the same radius r but of lengths & and 1 are fitted horizontally to the bottom of a tall vessel containing a liquid at constant Pressure head and flowing through these tubes....
-
What do you think of companies such as Motorola and Hewlett-Packard that establish job design policies to help employees balance their work and life commitments? Do you think such policies will help...
-
Carbon dioxide (CP = 38 J/mol-K) at 1.5 MPa and 25C is expanded to 0.1 MPa through a throttle valve. Determine the temperature of the expanded gas. Work the problem as follows: (a) Assuming the ideal...
-
In 2014, Barker contacted Price about a van Price had advertised for sale. The advertisement described the van as a 1994 Ford E350. Barker and Price agreed to meet, and, on April 9, Barker inspected...
-
Journal entries, T-accounts and source documents. Production Company produces gadgets for the coveted small appliance market. The following data reflects activity for the year 2008. Production Co....
-
Convert the following Conceptual Model to Relational Model. STUDENT *student_id student_name student_address fills SEAT *seat_no seat position K takes COURSE *course_name *course_number has CLASS...
-
Adam has been appointed trustee of Amy's testamentary express trust. The trust document states that the trust applies to "... most of my estate, including my shares and two-thirds of my antique...
-
Question 3 On January 1, 2025, Abel Company purchased three assets for $400,000. The information below relates to the assets that were purchased: Forklift Bulldozer Truck In order to make the...
-
What is common law and what are the characteristics of common law. Please provide a detailed answers.?
-
A start-up gaming company is crowdfunding their latest project. So far, they have received 3,937$. The company needs to raise 7,209$. $7209=3937+S$ for $s$, the additional money the company needs to...
-
clio offers the ability to add time in many places to capture every minute the attorney is working on a client's matter. of the options given, select all the areas where you can create or add a time...
-
The way we work, where we work, the environment we work in, and how we communicate with coworkers have changed dramatically over the past few years. Work that was traditionally performed in a...
-
What do you believe to be the role of leadership in ethical corporate citizenship? Are there role differences between leadership of organizations conducting business solely locally vs. those...
-
x 2-1.02 X T(X. y) Tot X=X1 xupuRy & incident angle a: reflection angle 090-8 m = to 8 riy-y = m (x-x) ton & = x1 tonB=26, tonx = 26 X1 what is the ton y and r.
-
Kims Konstructions has assembled the following data for a proposed straw-reinforced brick maker (SRBM): SRBM Cost: $26,000 Life: 5 years Revenue (p.a.) $11,000 Operating Expenses (p.a.) $3,000...
-
What recognition criteria are applied to assets and liabilities acquired in a business combination?
-
If the subsidiary has recorded goodwill in its records at acquisition date, how does this affect the preparation of the fair value adjustments?
-
MacDonalds Highland Shoppe Ltd. (MHS) imports top quality kilts and accessories directly from Scotland for sale to Canadian and American customers. Because of its international suppliers and...
-
What is a training objective? Write a sample training objective in behavioral terms.
-
What does a manager need to know to be sure that training provided satisfied the training objectives? How can these things be determined?
-
As an instructor, what can you do to help participants retain what they are learning?
Study smarter with the SolutionInn App