Exercise 14.5 ★ ★ CONSIDERATION TRANSFERRED On 1 September 2016, the directors of Monkfi sh Ltd approached the directors of Cod Ltd with the following proposal for the acquisition of the issued shares of Cod Ltd, conditional on acceptance by 90% of the shareholders of Cod Ltd by 30 November 2016: • Two fully paid ordinary shares in Monkfi sh Ltd plus $3.10 cash for every preference share in Cod Ltd, payable at acquisition date. • Three fully paid ordinary shares in Monkfi sh Ltd plus $1.20 cash for every ordinary share in Cod Ltd. Half the cash is payable at acquisition, and the other half in 1 year’s time. By 30 November, 90% of the ordinary shareholders and all of the preference shareholders of Cod Ltd had accepted the offer. The directors of Monkfi sh Ltd decided not to acquire the remaining ordinary shares. Share transfer forms covering the transfer were dated 30 November 2016, and showed a price per Monkfi sh Ltd ordinary share of $4.20. Monkfi sh Ltd’s incremental borrowing rate is 8% p.a. The statement of fi nancial position of Cod Ltd at 30 November 2016 was as follows:

Monkfi sh Ltd then appointed a new board of directors of Cod Ltd. This board took offi ce on 1 December 2016 and immediately: • revalued the asset Shares in Other Companies to its market value (assume no tax effect) • used the surplus so created to make a bonus issue of $32 000 to ordinary shareholders, each shareholder being allocated two ordinary shares for every ten ordinary shares held. Required Prepare all journal entries (in general form) to record the transactions in the records of

(a) Monkfi sh Ltd and

(b) Cod Ltd.