ABC Ltd. acquired 60% interest in Roger Ltd on 1 July 2018 for $80,000 when the equity
Question:
ABC Ltd. acquired 60% interest in Roger Ltd on 1 July 2018 for $80,000 when the equity of Roger Ltd comprised:
Share capital 60,000
Retained earnings 33,000
$93,000
On that same day, Roger Ltd acquired 50% interest in David Ltd for $50,000, when the equity of David Ltd comprised:
Share capital 35,000
Retained earnings 15,000
$50,000The equity of Roger Ltd and David Ltd on 30 June 2019 and 30 June 2020 are summarised below
Roger Ltd
| 30/06/2019 | 30/06/2020 | |
|---|---|---|
| Share capital | $65 000 | $65 000 |
| Retained earnings | 35 000 | 45 000 |
| Total | 100 000 | 110 000 |
David Ltd
| 30/06/2019 | 30/06/2020 | |
|---|---|---|
| Share capital | $40 000 | $40 000 |
| General reserve | 6 000 | 6 000 |
| Retained earnings | 20 000 | 25 000 |
| Total | 66 000 | 71 000 |
Required:
1. Calculate Direct Non Controlling Interest and In Direct Non Controlling Interest.
2. Calculate Goodwill on acquisition (please note, there is no fair value adjustment).
3. Prepare the Pre acquisition entries as at 30 June 2020 for the ABC Ltd group.
4. Prepare the journal entries at acquisition date for the ABC Ltd group.
Expert Answer:
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
