On 30 June 20X7, Edison Ltd acquired all the assets and liabilities of Oliver Ltd, with...

   

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On 30 June 20X7, Edison Ltd acquired all the assets and liabilities of Oliver Ltd, with Oliver Ltd going into liquidation. In exchange for these assets and liabilities, Edison Ltd issued 60,000 shares, and the fair value of each share at the acquisition date is $4. Costs of issuing these shares amounted to $2,000. Legal costs associated with the acquisition of Oliver Ltd amounted to $1,500. The assets and liabilities of Oliver Ltd at 30 June 20X7 were as follows: Cash Accounts receivable (Cost: $45 000, Estimated uncollectable debts: $5 000) Inventory Plant (Cost: $200 000, Accumulated depreciation: $80 000) Accounts payable Carrying amount 12 000 40 000 60 000 120 000 40 000 Fair value 12 000 36 000 76 000 145 000 40 000 Additional information: Oliver Ltd had not recorded an internally developed patent. Edison Ltd valued this at $26,000. Oliver Ltd had not recorded a legal claim as a liability due to the uncertainty of an outcome. Edison Ltd estimated the fair value of this contingent liability to be $5,000. Required: Prepare all the necessary journal entries in the records of Edison Ltd at 30 June 20X7. Note 1) Use the provided journal entry template to enter your answer. 2) Workings/calculations or narrations are NOT required. 3) The template should provide enough space. However, if you find the space is insufficient in the template or encounter a table formatting issue, write your journal entries below the template and ensure labelling DR or CR. On 30 June 20X7, Edison Ltd acquired all the assets and liabilities of Oliver Ltd, with Oliver Ltd going into liquidation. In exchange for these assets and liabilities, Edison Ltd issued 60,000 shares, and the fair value of each share at the acquisition date is $4. Costs of issuing these shares amounted to $2,000. Legal costs associated with the acquisition of Oliver Ltd amounted to $1,500. The assets and liabilities of Oliver Ltd at 30 June 20X7 were as follows: Cash Accounts receivable (Cost: $45 000, Estimated uncollectable debts: $5 000) Inventory Plant (Cost: $200 000, Accumulated depreciation: $80 000) Accounts payable Carrying amount 12 000 40 000 60 000 120 000 40 000 Fair value 12 000 36 000 76 000 145 000 40 000 Additional information: Oliver Ltd had not recorded an internally developed patent. Edison Ltd valued this at $26,000. Oliver Ltd had not recorded a legal claim as a liability due to the uncertainty of an outcome. Edison Ltd estimated the fair value of this contingent liability to be $5,000. Required: Prepare all the necessary journal entries in the records of Edison Ltd at 30 June 20X7. Note 1) Use the provided journal entry template to enter your answer. 2) Workings/calculations or narrations are NOT required. 3) The template should provide enough space. However, if you find the space is insufficient in the template or encounter a table formatting issue, write your journal entries below the template and ensure labelling DR or CR.

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