Blink Ltd is seeking to expand its share of the men's products market and has negotiated...
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Blink Ltd is seeking to expand its share of the men's products market and has negotiated to acquire the operations of Weeping Ltd At 1 July 2023, the trial balances of the two companies were as follows. Cash Accounts receivable Inventories Shares in listed companies Land and buildings (net) Plant and equipment (net) Goodwill (net) Accounts payable Bank overdraft Debentures Mortgage loan Contributed equity: Ordinary shares of $1, fully paid Other reserves Retained earnings (30/6/23) Blink Ltd Weeping Ltd $ $ 145 000 5 200 34 000 21 300 56 000 30 000 16 000 22 000 70 000 40 000 130 000 105 000 6 000 5 000 228 500 40 000 0 0 30 000 457 000 65 000 0 50 000 100 000 200 000 15 000 27 000 457 000 150 000 6 500 2 000 228 500 Blink Ltd is to acquire all assets (except Cash and Shares in listed companies) of Weeping Ltd. Acquisition-related costs are expected to be $7 600. The net assets of Weeping Ltd are recorded at fair value except for the following. Carrying amount Fair value $ $ 30 000 26 000 40 000 80 000 22 000 18 000 (40 000) (49 100) 0 (29 700) Inventories Land and Buildings Shares in Listed Companies Accounts Payable Accrued Leave In exchange, the shareholders of Weeping Ltd are to receive, for every three Weeping Ltd shares held, one Blink Ltd share worth $2.50 each. Costs to issue these shares are $950. Additionally, Blink Ltd will transfer to Weeping Ltd its 'Shares in Listed Companies' asset, which has a fair value of $15 000. Blink Ltd will also give Weeping Ltd sufficient additional cash to enable Weeping Ltd to pay all its creditors and liquidation costs of $8 700. Required: Prepare the acquisition analysis and journal entries to record the acquisition of Weeping Ltd in the records of Blink Ltd. Blink Ltd is seeking to expand its share of the men's products market and has negotiated to acquire the operations of Weeping Ltd At 1 July 2023, the trial balances of the two companies were as follows. Cash Accounts receivable Inventories Shares in listed companies Land and buildings (net) Plant and equipment (net) Goodwill (net) Accounts payable Bank overdraft Debentures Mortgage loan Contributed equity: Ordinary shares of $1, fully paid Other reserves Retained earnings (30/6/23) Blink Ltd Weeping Ltd $ $ 145 000 5 200 34 000 21 300 56 000 30 000 16 000 22 000 70 000 40 000 130 000 105 000 6 000 5 000 228 500 40 000 0 0 30 000 457 000 65 000 0 50 000 100 000 200 000 15 000 27 000 457 000 150 000 6 500 2 000 228 500 Blink Ltd is to acquire all assets (except Cash and Shares in listed companies) of Weeping Ltd. Acquisition-related costs are expected to be $7 600. The net assets of Weeping Ltd are recorded at fair value except for the following. Carrying amount Fair value $ $ 30 000 26 000 40 000 80 000 22 000 18 000 (40 000) (49 100) 0 (29 700) Inventories Land and Buildings Shares in Listed Companies Accounts Payable Accrued Leave In exchange, the shareholders of Weeping Ltd are to receive, for every three Weeping Ltd shares held, one Blink Ltd share worth $2.50 each. Costs to issue these shares are $950. Additionally, Blink Ltd will transfer to Weeping Ltd its 'Shares in Listed Companies' asset, which has a fair value of $15 000. Blink Ltd will also give Weeping Ltd sufficient additional cash to enable Weeping Ltd to pay all its creditors and liquidation costs of $8 700. Required: Prepare the acquisition analysis and journal entries to record the acquisition of Weeping Ltd in the records of Blink Ltd.
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1 Acquisition Analysis Blink Ltd Weeping Ltd Fair value of identifiable assets and liabilities acqui... View the full answer
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