P Ltd acquired 70% of the ordinary shares of S Ltd on August 1, 2011. At that date the fair values of the net assets of S Ltd were the same at their carrying values with the exception of property, plant and equipment which showed a surplus of $400,000. At the date of acquisition the average remaining useful lives of the PPE was five years. Show the journal entries to reflect the revaluation in the consolidated workings as at July 31, 2013.

Assume that the subsidiary had not recorded the revaluation surplus in its own financial statements.

Answer rating: 100% (QA)

Step 1 In the consolidated workings additional depreciation on the surplus of property plant ... View the full answer