Maxix Ltd purchased all the issued shares of Somix Ltd for $1177000 on 1 July 2020...

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Maxix Ltd purchased all the issued shares of Somix Ltd for $1177000 on 1 July 2020 when the equity of Somix Ltd was as follows; Share capital Asset revaluation surpluss Retained earnings At this date, Somix Ltd had not recorded any goodwill, and all identifiable assets and liabilities were recorded at fair value except for the followings; Account Inventories Land Vehicle Contingent Liability Unrecorded Asset Unrecorded Asset 470800 353100 176550 Cost Carrying Amount $35,300 $88,000 $109,000 $136,250 Somix Ltd identified at acquisition date a lawsuit where Somix Ltd was sued by a former supplier with the Fairvalue of: Somix Ltd had unrecorded and internally generated Patent with the FairValue of: Somix Ltd had unrecorded and internally generated in- process research and development with the FairValue of: Fair value Further life(Years) $38,800 $97,000 $131,000 $14,000 $35,000 $26,000 10 Tax rate:30%. Required 1.Prepare the acquisition analysis at acquisition date. 2.Prepare the business combination valuation entries and the pre-acquisition entry at acquisition date. 3. Prepare worksheet adjusting journal entries for the consolidation on 30 June 2021, considering 40% of inventory were sold by 30 June 2021 and no other changes in Somix's equity since the acquisition date. 4-In relation to the following intragroup transactions during the year ended 30 June 2021, prepare adjusting journal entries for the consolidation worksheet at 30 June 2021. a. Somix Ltd sold a motor vehicle to Maxix Ltd for $81000. This had a carrying amount to Somix Ltd of $76950. Both entities depreciate motor vehicles at a rate of 10% p.a. on cost. b. Maxix Ltd sold inventories to Somix Ltd for $93000 on credit, recording a profit of $18600. Half of the inventories were unsold by Somix Ltd at 30 June 2021. c. Somix Ltd sells inventories to Maxix Ltd for $101000 in cash. These inventories had previously cost Somix Ltd $70700, and remain unsold by Maxix Ltd at the end of the period. d. Maxix Ltd sells inventories to Somix Ltd for $95000 in cash (original cost to Maxix Ltd was $66500) and 80% are sold externally by 30 June 2021. e. Somix paid $12000 dividend. Maxix Ltd purchased all the issued shares of Somix Ltd for $1177000 on 1 July 2020 when the equity of Somix Ltd was as follows; Share capital Asset revaluation surpluss Retained earnings At this date, Somix Ltd had not recorded any goodwill, and all identifiable assets and liabilities were recorded at fair value except for the followings; Account Inventories Land Vehicle Contingent Liability Unrecorded Asset Unrecorded Asset 470800 353100 176550 Cost Carrying Amount $35,300 $88,000 $109,000 $136,250 Somix Ltd identified at acquisition date a lawsuit where Somix Ltd was sued by a former supplier with the Fairvalue of: Somix Ltd had unrecorded and internally generated Patent with the FairValue of: Somix Ltd had unrecorded and internally generated in- process research and development with the FairValue of: Fair value Further life(Years) $38,800 $97,000 $131,000 $14,000 $35,000 $26,000 10 Tax rate:30%. Required 1.Prepare the acquisition analysis at acquisition date. 2.Prepare the business combination valuation entries and the pre-acquisition entry at acquisition date. 3. Prepare worksheet adjusting journal entries for the consolidation on 30 June 2021, considering 40% of inventory were sold by 30 June 2021 and no other changes in Somix's equity since the acquisition date. 4-In relation to the following intragroup transactions during the year ended 30 June 2021, prepare adjusting journal entries for the consolidation worksheet at 30 June 2021. a. Somix Ltd sold a motor vehicle to Maxix Ltd for $81000. This had a carrying amount to Somix Ltd of $76950. Both entities depreciate motor vehicles at a rate of 10% p.a. on cost. b. Maxix Ltd sold inventories to Somix Ltd for $93000 on credit, recording a profit of $18600. Half of the inventories were unsold by Somix Ltd at 30 June 2021. c. Somix Ltd sells inventories to Maxix Ltd for $101000 in cash. These inventories had previously cost Somix Ltd $70700, and remain unsold by Maxix Ltd at the end of the period. d. Maxix Ltd sells inventories to Somix Ltd for $95000 in cash (original cost to Maxix Ltd was $66500) and 80% are sold externally by 30 June 2021. e. Somix paid $12000 dividend.

Answer rating: 100% (QA)

1Prepare the acquisition analysis on the acquisition date ANSWER Maxix Ltd buys 100 of Somix Share for 1177000 on 1 July 2020 Tax 30 Now the acquisition analysis at 1 July 2020 Then Net reasonable val... View the full answer