The equity of Steve Ltd consisted of share capital of $97 000 and retained earnings of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The equity of Steve Ltd consisted of share capital of $97 000 and retained earnings of $ 66,800 on 1 July 2021. All the identifiable assets and liabilities of Steven Ltd were recorded at amounts equal to fair value except for: Plant (cost $90,000) Inventories Brand Carrying amount 50 000 27 600 $76 000 Fair Value 59 000 32 000 $86 000 Jones Ltd acquired all the issued shares of Steve Ltd for $ 185,000 on 1 July 2021. The Brand was considered to have an indefinite life. It was estimated that the plant had a further life of 6 years and was depreciated on a straight-line basis. All the inventories were sold by 30 June 2022. In May 2022, Steve Ltd transferred $ 23,500 from the retained earnings on hand at 1 July 2021 to a general reserve. In June 2022, Steve Ltd conducted an impairment test on the Band and on the goodwill acquired. As a result, the goodwill was considered to be impaired by $600 and brand by $ 6,500. The tax rate is 30%. Required 1. Prepare the acquisition analysis at 1 July 2021. 2. Prepare the consolidation worksheet entries for Jones Ltd's group at 1 July 2021. 3. Prepare the consolidation worksheet entries for Jones Ltd's group at 30 June 2022. The equity of Steve Ltd consisted of share capital of $97 000 and retained earnings of $ 66,800 on 1 July 2021. All the identifiable assets and liabilities of Steven Ltd were recorded at amounts equal to fair value except for: Plant (cost $90,000) Inventories Brand Carrying amount 50 000 27 600 $76 000 Fair Value 59 000 32 000 $86 000 Jones Ltd acquired all the issued shares of Steve Ltd for $ 185,000 on 1 July 2021. The Brand was considered to have an indefinite life. It was estimated that the plant had a further life of 6 years and was depreciated on a straight-line basis. All the inventories were sold by 30 June 2022. In May 2022, Steve Ltd transferred $ 23,500 from the retained earnings on hand at 1 July 2021 to a general reserve. In June 2022, Steve Ltd conducted an impairment test on the Band and on the goodwill acquired. As a result, the goodwill was considered to be impaired by $600 and brand by $ 6,500. The tax rate is 30%. Required 1. Prepare the acquisition analysis at 1 July 2021. 2. Prepare the consolidation worksheet entries for Jones Ltd's group at 1 July 2021. 3. Prepare the consolidation worksheet entries for Jones Ltd's group at 30 June 2022.
Expert Answer:
Related Book For
Posted Date:
Students also viewed these programming questions
-
How does your organization navigate the complexities of global financial markets and geopolitical uncertainties to deliver value to clients while managing exposure to external risks ?
-
At December 31, 2017, Lebron Company distributes $50,000 of cash dividends. Its outstanding common stock has a par value of $400,000, and its 6% preferred stock has a par value of $100,000 at...
-
A company's net income for financial statement purposes is $300,000. Included in this amount are the following: a $40,000 gain from the sale of Class 8 equipment for $60,000 that had an original cost...
-
Describe some practical examples of the single-resource sequencing problem.
-
Glenn Company sells a product for $80 per unit. Variable costs are $60 per unit, and fixed costs are $800 per month. The company expects to sell 560 units in September. Calculate the contribution...
-
Agrichem manufactures Insect-Be-Gone. Each bag of the product contains 60 pounds of direct materials. Twenty-five percent of the materials evaporate during manufacturing. The budget allows the direct...
-
Joe Henrys machine shop uses 2,500 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets: a) Given...
-
California Graphics is a U.S. corporation with $200 million of U.S.-source income and $10 million of foreign-source income. In addition, California Graphics has three-quarters ownership of a Canadian...
-
1. What legal provision 'saved' common law and equity as a source of law in your chosen country at or after it obtained independence or self-governance? 2. Where was common law placed in the...
-
Compute the surface area of revolution about the x-axis over the interval. y=x-lnx, [1, e]
-
If the US Dollar is not backed by gold anymore, what is it backed by? When and why was the gold standard eliminated? Could the dollar and its perceived value be at risk?
-
What are the implications of portfolio theory for investors?
-
a. What is the preemptive right? b. Why is it important to shareholders?
-
Explain why holding investments in portfolios has such a profound impact on the concept of financial risk.
-
Explain the risk/return trade-off.
-
a. What is interest rate risk? b. What is price risk? c. What is reinvestment rate risk?
-
Which of the following is the curve defined by the parametric equations x = 4 sint, y = 8 cost? Y Option A Option C x Y Option B Option D x
-
A superior criticized a sales manager for selling high-revenue, low-profit items instead of lower-revenue but higher-profit items. The sales manager responded, My income is based on commissions that...
-
Professional accountants are expected to be objective when performing their duties. How would you reconcile this expectation with the central assumptions of Positive Accounting Theory, and are they...
-
A Ltd has a 60 per cent interest in B Ltd and B Ltd has an 80 per cent interest in C Ltd. Both acquisitions were made in 2020. During the financial year ending 30 June 2023, A Ltd paid a dividend of...
-
Michael Ltd acquires all of the issued capital of Petersen Ltd for a cash payment of $600 000 on 30 June 2023. The statements of financial position of both entities immediately following the purchase...
-
Fill in the Blank. In a random process, the outcome of an experiment will be a function of some _________ such as time.
-
What is the covariance between two random variables \(X\) and \(Y\) ?
-
The joint density function of two random variables \(X\) and \(Y\) is given by \[p_{X, Y}(x, y)= \begin{cases}\frac{x y}{9}, & 0 \leq x \leq 2,0 \leq y \leq 3 \\ 0, & \text { elsewhere }\end{cases}\]...
Study smarter with the SolutionInn App