On 1 July 2024, Lota Ltd acquired all the issued shares of Mokai Ltd for $250 000 The financial statements of Mokai Ltd showed its equity at that date to be as follows All the assets and liabilities of Mokai Ltd were recorded at amounts equal to their fair values at that date During the year ending...

On 1 July 2024, Lota Ltd acquired all the issued shares of Mokai Ltd for $250 000.

Question:

On 1 July 2024, Lota Ltd acquired all the issued shares of Mokai Ltd for $250 000. The financial statements of Mokai Ltd showed its equity at that date to be as follows.

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All the assets and liabilities of Mokai Ltd were recorded at amounts equal to their fair values at that date.

During the year ending 30 June 2025, Mokai Ltd undertook the following actions:

• On 10 September 2024, paid a dividend of $30 000 from the profits earned prior to 1 July 2024.

• On 1 January 2025, transferred $10 000 from the general reserve existing at 1 July 2024 to retained earnings.

• On 28 June 2025, declared a dividend of $25 000 from the profits earned after 1 July 2024 to be paid on 15 August 2025.

Required

1. Prepare the acquisition analysis at 1 July 2024.

2. Prepare the consolidation worksheet entries for Lota Ltd’s group at 1 July 2024.

3. Prepare the consolidation worksheet entries for Lota Ltd’s group at 30 June 2025.

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1 Acquisition analysis at 1 July 2024 2 Consolidation worksheet entries at 1 July 2024 There are no ...View the full answer

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Question Posted: Apr 16, 2024 01:00 AM

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On 1 July 2024, Lota Ltd acquired all the issued shares of Mokai Ltd for $250 000.

Question:

Share capital (20 000 shares) $120 000 General reserve 50 000 Retained earnings 80 000

Step by Step Answer:

1 Acquisition analysis at 1 July 2024 2 Consolidation worksheet entries at 1 July 2024 There are no ...View the full answer

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