Swift Co. had post-closing trial balances on September 30 20X0, as follows:

Items	Debit ($)	Credit ($)
Cash	[X1]
Short-term investments	15,200
Trade receivables	30,000
Inventories	22,000
Non-current assets	46,500
Bank		5,000
Trade payables		40,000
12% Loan notes		20,000
Ordinary shares (par value: 1$)		100,000
Retained earnings		20,000
Revaluation surplus		5,000
Wages and salaries		10,000
Tax payables		3,500
Accruals		200
Total	[X2]	203,700

The following information for transactions from October to December 20X0 are available:

1. Cash purchase: $45,000, Credit purchase: $80,000

Inventory at 31 December 20X0 was valued at $30,000 based on its original cost. However,

$10,000 of this inventory has been obsolete and the directors have agreed to sell it in January 20X1 for a cash price of $6,000.

At December 31, 20X0, outstanding trade payables were $50,000

2. Total sales: $250,000. At December 31, 20X0, trade receivables were $50,000. Payment discounts allowed: $11,000
3. Wages and salaries expense incurred: $15,000. Wages and salaries outstanding for the year ended 31 Dec 20X0: $5,000
4. Swift was exempted from income tax in the fourth quarter of 20X0.
5. On January 10^th 20X1, one customer of Swift who owed $2,000 declared bankruptcy.
6. Telephone and other expenses incurred and paid by cash: $9,000
7. Loan notes were issued on 01 September 20X0. Swift paid loan note interest for the first 6 months at 31 December 20X0, by cash.
8. Swift made a right issue of 1 share for every 10 held at a premium of 40 cents per share.

9. Dividends paid amounted to $9,000
10. The following information relates to PPE:

	Cost ($)	Accumulated Depreciation (30/9/X0) ($)	Carrying amount ($)
Building	42,000	12,000	30,000
Machinery	20,000	6,000	14,000
Furniture	8,000	5,500	2,500
Total	70,000	23,500	46,500

1. The building was depreciated 10% at cost annually
2. Machinery and furniture had no residual value, 5 years of useful life, and were depreciated on the basis of the straight-line method
3. On 31/10/20X0, Swift acquired a vehicle of $27,000, the registration fee was

$1,000. All payment was settled by cash. The expected residual value was $4,000. The vehicle was depreciated at 20% per annum using the reducing balance method.

4. On 31/12/20X0, Swift decided to value its building to $55,000.

Required:

1. Give appropriate information in X1, X2 (10 marks)
2. Make accounting entries for those transactions above (Show your workings). (35 marks)
3. Prepare: (for internal use):
   1. The Post-Closing Trial Balance at December 31^st 20X0 (10 marks)
   2. The statement of financial position as of December 31^st 20X0 (10 marks)
4. On 01 January 20X1, Swift Co. acquired X3 % of ordinary shares of Jennifer Co. Swift partly owned Jennifer and achieved the control. The market value of Jennifer’s share at the acquisition date was ($) X4.
5. Give appropriate information in X3, X4 
6. Calculate the NCI and Goodwill at the acquisition date
7. Prepare the consolidated statement of financial position as at acquisition date? 

Additional information: The statement of financial position of Jennifer Co. at 01 January 20X1 was as follows:

JENNIFER CO

Statement of financial position as of 01 January 20X1

Assets

Non-current assets Current assets	82,000
Inventory	5,000
Trade receivables	15,000
Total assets	102,000
Equity and Liabilities Equity Share capital (1$)	60,000
Retained earnings	15,000

Other reserves	3,000
Liabilities
Trade payables	24,000
Total Equity and liabilities	102,000

Answer rating: 100% (QA)

Required Give appropriate information in X1 X2 X1 45000 X2 234400 Make accounting entries for those transactions above Show your workings October Cash purchase Debit Inventory 45000Credit Cash 45000 C... View the full answer