Company S acquired 80% of Company R on December 31, 2021, for $ 3,000,000 cash. On the
Question:
Company S acquired 80% of Company R on December 31, 2021, for $ 3,000,000 cash.
On the date of acquisition, the fair market value of R’s net identifiable assets was equal to their book values except for inventories (fair value $1,800,000). capital assets (net) (fair value $ 3,200,000) and liabilities (fair value $ 2,400,000).
Required:
Using the fair value enterprise method of consolidation under IFRS:
1. Prepare all consolidation and elimination journal entries on December 31, 2021, and post these journal entries to the consolidation worksheet supplied to you.
2. Prepare a consolidated balance sheet in worksheet format as of December 31, 2021, using the
consolidation worksheet provided to you. Add additional accounts which you believe are necessary.
3.What specific numerical differences would exist in the final consolidated balance sheet if the identifiable net asset method of consolidation was used in the above circumstances?
Consolidated Worksheet Provided:
Intermediate Accounting 2014 FASB Update
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield