Below are the statements of financial position of H Ltd and S Ltd as at 31...

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Below are the statements of financial position of H Ltd and S Ltd as at 31 December 2010: H Ltd S Ltd Non-current assets $000 5000 Property, plant and equipment 100 140 Investments in S at cost 180 280 140 Current assets Inventory Trade receivables Cash Total assets Equity and liabilities Equity Share capital Share premium Retained earnings Non-current liabilities 10% loan notes Current liabilities 30 35 20 10 10 5 340 190 200 100 10 30 40 20 250 150 65 25 40 Total equity and liabilities 340 190 1. H Ltd bought 80% shares in S Ltd in 2010 2. H Ltd's accounts show $6,000 owing to S Ltd; S Ltd's accounts show $8,000 owed by H Ltd. The difference is explained as cash in transit. 3. S Ltd transferred goods to H Ltd at a transfer price of $18,000 at a mark-up of 50%. Two-thirds remained in inventory at the year end. 4. H Ltd transfers an item of plant to its subsidiary (S Ltd) for $6,000 at the start of 2010. The plant originally cost of $10,000 and had an original useful economic life of 5 years when purchased 3 years ago. The useful economic life of the asset has not changed as a result of the transfer. Required: 1. Calculate the goodwill based on the given information. 2. Calculate the unrealized profit on the transaction at the end of the year of transfer (2010). 3. Prepare elimination entry(ies) based on the given information Below are the statements of financial position of H Ltd and S Ltd as at 31 December 2010: H Ltd S Ltd Non-current assets $000 5000 Property, plant and equipment 100 140 Investments in S at cost 180 280 140 Current assets Inventory Trade receivables Cash Total assets Equity and liabilities Equity Share capital Share premium Retained earnings Non-current liabilities 10% loan notes Current liabilities 30 35 20 10 10 5 340 190 200 100 10 30 40 20 250 150 65 25 40 Total equity and liabilities 340 190 1. H Ltd bought 80% shares in S Ltd in 2010 2. H Ltd's accounts show $6,000 owing to S Ltd; S Ltd's accounts show $8,000 owed by H Ltd. The difference is explained as cash in transit. 3. S Ltd transferred goods to H Ltd at a transfer price of $18,000 at a mark-up of 50%. Two-thirds remained in inventory at the year end. 4. H Ltd transfers an item of plant to its subsidiary (S Ltd) for $6,000 at the start of 2010. The plant originally cost of $10,000 and had an original useful economic life of 5 years when purchased 3 years ago. The useful economic life of the asset has not changed as a result of the transfer. Required: 1. Calculate the goodwill based on the given information. 2. Calculate the unrealized profit on the transaction at the end of the year of transfer (2010). 3. Prepare elimination entry(ies) based on the given information

Answer rating: 100% (QA)

1 Goodwill Share Capital of S Ltd Share Premium of S Ltd Retained Earning... View the full answer