On 1 July 2018, Nick Ltd acquired all the issued shares (ex div.) of Bear Ltd. At
Question:
On 1 July 2018, Nick Ltd acquired all the issued shares (ex div.) of Bear Ltd. At this date the financial statements of Bear Ltd showed the following balances in its accounts:
Share capital 150000
Retained earnings 80000
General reserve 40000
Dividend payable 15000
Goodwill 10000 At 1 July 2018, all the identifiable assets and liabilities of Bear Ltd were recorded at amounts equal to their fair values.
The financial statements of Nick Ltd and Bear Ltd at 30 June 2019 contained the following information:
Nick Ltd Bear Ltd
Profit for the period 35,000 25,000
Retained earnings (1/7/18) 90,000 80,000
Transfer from general reserve 0 10,000
Retained earnings (30/6/19) 125,000 115,000
Share capital 700,000 150,000
General reserve 92,000 30,000
Total Equity 971,000 295,000
Provisions 30,000 20,000
Payables 15,000 25,000
Loans 55,000 110,000
Total Equity & Liabilities 1,017,000 450,000
Plant 600,000 820,000
Accum. Depreciation (295,000) (650,000)
Fixtures 300,000 120,000
Accum. Depreciation (180,000) (80,000)
Land 200,000 14,000
Brands 50,000 30,000
Shares in Bear Ltd 277,000 0
Inventory 45,000 40,000
Cash 5,000 7,000
Receivables 15,000 13,000
Goodwill 0 10,000
Total Assets 1,017,000 450,000
Required
Prepare the consolidation journal entries and the consolidation worksheet.
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett