Flag Harley Ltd purchased all the equity of Davidson Ltd on 1 January 20X4 for $150 000.
Question:
Flag Harley Ltd purchased all the equity of Davidson Ltd on 1 January 20X4 for $150 000. At the control date, the equity of Davidson was recorded as: Paid-up capital $36 000 Retained profits $20 400 and its assets were recorded at fair value except for: Buildings: Carrying amount $63 000 Fair value $133 200 The building was purchased 10 years ago for $120 000 and is being depreciated straight-line over 20 years. When purchased, its estimated residual value was $6 000. The building is carried at cost by Davidson Ltd and in the consolidation. Goodwill impairment recognised was $7 000 in 20X4 and $10 500 in 20X5.
Required:
1. Prepare journal entries for consolidation data adjustments and/or eliminations:
at the control date;
one year after control date on 31 December 20X4; and
two years after control date on 31 December 20X5
Expert Answer:
As per given Paid Up Capital 36000 Retained Profit 20400 Total identifiableNet Assets 56400 Add Incr... View the full answer
