1 July 2021, Westham Ltd purchase a 40% share to Oreo Ltd, which requires the purchase of 110,000 shares at a projected price of $20.

-On July 1, 2019, Oreo Ltd is expected to have $5 million in assets and $3 million in liabilities. Many of Oreo Ltd.'s assets, according to the financial analyst, are carried at far below their fair value.

-Total comprehensive income for the year ending 30 June 2020 is projected to be $300,000. Of this amount, $250,000 would be net profit whilst $50,000 would be other comprehensive income.

-During the year ending 30 June 2022. Westham Ltd is projected to purchase approximately $100,000 of inventory from Oreo Ltd and sell $20,000 of non-current assets to Orion Ltd. In addition, Orion Ltd is expected to pay a dividend of 5cents per share.

Explain the accounting requirements under AASB128 with the investment?

Explain how the following list of profits will be recognized by Westham Ltd.

Answer rating: 100% (QA)

Accounting treatment in the given alternatives Option 1 Buying 40 of the issued share capital of the ... View the full answer