Genair Bhd acquired a 70% interest in Fastrack Bhd on 31 December 2019. The acquisition was...
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Genair Bhd acquired a 70% interest in Fastrack Bhd on 31 December 2019. The acquisition was paid in cash RM180,000 and issued 30,000 shares at market value of RM15 per share. The fair value of the remaining 30% non-controlling interest was RM270,000. Other costs incurred for the acquisition were legal fees RM8,000, consulting fees RM12,000 and incidental costs RM10,000. The statement of financial position of Genair Bhd and Fastrack Bhd and the fair value of Fastrack assets and liability on that date are as follows: Genair Bhd Fastrack Bhd RM 230,000 RM 35,000 630,000 Cash Investment Fastrack Account Receivable Inventories Land Building-net Equipment - net Total assets 100,000 90,000 400,000 450,000 320,000 140,000 RM2,220,000 RM 785,000 50,000 60,000 200,000 300,000 RM1,500,000 RM 420,000 Share capital Retained earnings Long-term loan Account payables 300,000 35,000 Total liabilities and equity RM2,220,000 RM 785,000 ======== All asset and liabilities were at fair value except: Book value RM 200,000 300,000 140,000 ===== 300,000 390,000 60,000 ========== Fair value RM 250,000 350,000 150,000 Land Building - net Equipment - net Genair uses the fair value method to measure the non-controlling interest. REQUIRED: a) Prepare journal entries to record the acquisition of Fastrack. b) Calculate goodwill on consolidation. c) Prepare consolidation journal entries of Genair Bhd and Fastrack Bhd. d) Prepare the Consolidated Statement of Financial Position of Genair and Subsidiary as at 31 December 2019. Genair Bhd acquired a 70% interest in Fastrack Bhd on 31 December 2019. The acquisition was paid in cash RM180,000 and issued 30,000 shares at market value of RM15 per share. The fair value of the remaining 30% non-controlling interest was RM270,000. Other costs incurred for the acquisition were legal fees RM8,000, consulting fees RM12,000 and incidental costs RM10,000. The statement of financial position of Genair Bhd and Fastrack Bhd and the fair value of Fastrack assets and liability on that date are as follows: Genair Bhd Fastrack Bhd RM 230,000 RM 35,000 630,000 Cash Investment Fastrack Account Receivable Inventories Land Building-net Equipment - net Total assets 100,000 90,000 400,000 450,000 320,000 140,000 RM2,220,000 RM 785,000 50,000 60,000 200,000 300,000 RM1,500,000 RM 420,000 Share capital Retained earnings Long-term loan Account payables 300,000 35,000 Total liabilities and equity RM2,220,000 RM 785,000 ======== All asset and liabilities were at fair value except: Book value RM 200,000 300,000 140,000 ===== 300,000 390,000 60,000 ========== Fair value RM 250,000 350,000 150,000 Land Building - net Equipment - net Genair uses the fair value method to measure the non-controlling interest. REQUIRED: a) Prepare journal entries to record the acquisition of Fastrack. b) Calculate goodwill on consolidation. c) Prepare consolidation journal entries of Genair Bhd and Fastrack Bhd. d) Prepare the Consolidated Statement of Financial Position of Genair and Subsidiary as at 31 December 2019.
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Horngrens Financial And Managerial Accounting The Financial Chapters
ISBN: 9780134486840
6th Edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
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