On the 1st of July 2022, Savannah Inc. underwent an acquisition process in which they acquired...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On the 1st of July 2022, Savannah Inc. underwent an acquisition process in which they acquired all the issued shares of Amelia Inc. The total consideration for this acquisition included $30,000 in cash and 20,000 shares in Savannah Ltd, valued at $3 per share on the acquisition date. At the time of this acquisition, the equity structure of Amelia Inc. was as follows: Share Capital: Amelia Inc. had a total share capital of $66,000. Retained Earnings: Amelia Inc. had retained earnings amounting to $6,000. As of 1 July 2022, all the identifiable assets and liabilities of Amelia Inc. were recorded at amounts equal to their fair values, with a few exceptions: Plant (cost $150 000) Patents Inventories Carrying amount Fair value $ 120 000 90 000 18 000 $ 123 000 105 000 22 500 The plant identified on the acquisition date (1 July 2022) was expected to have a 5-year lifespan starting from that date. On August 18, 2022, the patents identified at the time of acquisition were sold for $120,000 to an external entity, ABC Corporation. The patents had indefinite useful life and had not been amortised. All inventories identified during the acquisition process were subsequently sold to another company, XYZ Enterprise, by 30 June 2023. On 1 January 2023, Savannah Inc. sold inventories to Amelia Inc. for $1,200. The cost of these inventories was $600. However, as of 30 June 2023, Amelia Inc. had not yet sold these inventories and continued to hold them in their inventory. On June 1, 2023, Amelia Inc. purchased a plant from an external company, Darwin Inc., for a cost of $14,000. On the same date, Amelia Inc. sold this plant to Savannah Inc. for $15,200. The plant is subject to depreciation at an annual rate of 10%. Required: Part D: Prepare consolidation worksheet entries as at 30 June 2023. On the 1st of July 2022, Savannah Inc. underwent an acquisition process in which they acquired all the issued shares of Amelia Inc. The total consideration for this acquisition included $30,000 in cash and 20,000 shares in Savannah Ltd, valued at $3 per share on the acquisition date. At the time of this acquisition, the equity structure of Amelia Inc. was as follows: Share Capital: Amelia Inc. had a total share capital of $66,000. Retained Earnings: Amelia Inc. had retained earnings amounting to $6,000. As of 1 July 2022, all the identifiable assets and liabilities of Amelia Inc. were recorded at amounts equal to their fair values, with a few exceptions: Plant (cost $150 000) Patents Inventories Carrying amount Fair value $ 120 000 90 000 18 000 $ 123 000 105 000 22 500 The plant identified on the acquisition date (1 July 2022) was expected to have a 5-year lifespan starting from that date. On August 18, 2022, the patents identified at the time of acquisition were sold for $120,000 to an external entity, ABC Corporation. The patents had indefinite useful life and had not been amortised. All inventories identified during the acquisition process were subsequently sold to another company, XYZ Enterprise, by 30 June 2023. On 1 January 2023, Savannah Inc. sold inventories to Amelia Inc. for $1,200. The cost of these inventories was $600. However, as of 30 June 2023, Amelia Inc. had not yet sold these inventories and continued to hold them in their inventory. On June 1, 2023, Amelia Inc. purchased a plant from an external company, Darwin Inc., for a cost of $14,000. On the same date, Amelia Inc. sold this plant to Savannah Inc. for $15,200. The plant is subject to depreciation at an annual rate of 10%. Required: Part D: Prepare consolidation worksheet entries as at 30 June 2023.
Expert Answer:
Related Book For
Mergers Acquisition And Other Restructuring Activities
ISBN: 9780123854858
6th Edition
Authors: Donald M. Depamphilis
Posted Date:
Students also viewed these accounting questions
-
On the 1st of July 2022, Savannah Inc. underwent an acquisition process in which they acquired all the issued shares of Amelia Inc. The total consideration for this acquisition included $30,000 in...
-
Consider the following set of data where an experiment was done to determine the molarity of a solute. What mass of sample is needed to reduce the %RSD to 0.10% if the sampling constant is 17.3 g?...
-
Use each of the Adams-Bashforth methods to approximate the solutions to the following initial-value problems. In each case use starting values obtained from the Runge-Kutta method of order four....
-
What do you do to pass the time?In environments like our current one, where more and more people are being mandated to stay at home, what are you solutions for working from home, continuing your...
-
Because both radial readings on the top of a vertical motor are horizontal, how can you differentiate them?
-
Hallihan Company completed the following selected transactions during June 2010: June 1. Established a petty cash fund of $500. 12. The cash sales for the day, according to the cash register records,...
-
What replacement behavior could be taught to a student as part of a behavior intervention plan and what type of generalization could be used to help the student apply that behavior to a different...
-
Giant acquired all of Smalls common stock on January 1, 2017, in exchange for cash of $770,000. On that day, Small reported common stock of $170,000 and retained earnings of $400,000. At the...
-
1. Between the Likert Scale and the Guttman Scale, which would you be more willing to participate in and why? 2. What do you think is the most effective way to measure attitude?
-
In this module be coming a helper what did you learn. What are Values to Consider in Choosing Your Career Path? What to avoid in dealing with Value Conflicts? What is your view in helping process? If...
-
Read the article Buy Yourself Less Stuff by MP Dunleavy and then answer the following questions: 1. What is the main idea of an article? 2. What does the author mean in paragraph 8 and how does this...
-
As the old saying goes, "it's not what you say, it's how you say it." Words, actions, and visuals have a somewhat equal impact depending on the issues and social circumstances we are in. What is the...
-
Question 4 Internal Rules of a Company (5 marks) What are Replaceable Rules in the Corporations Act 2001 (Cth)? Give one example of a replaceable rule in the Corporations Act.
-
Imagine you are on a large ocean liner with 1000 passengers and crew. The passengers and crew are all from countries other than the United States. Suddenly, a storm hits and the entire ship is...
-
A line l passes through the points with coordinates (0, 5) and (6, 7). a. Find the gradient of the line. b. Find an equation of the line in the form ax + by + c = 0.
-
Elijah has played basketball his entire life, and his hard work paid off when he received a full ride scholarship to play at University of North Carolina. He received $50,000 for his first year which...
-
Francesco owns a warehouse that is used in his auto parts store. The warehouse has a FMV of \($85,000,\) an adjusted basis of \($45,000,\) and an outstanding mortgage of \($55,000.\) Francesco is not...
-
Delilah and her family competed on the game show, Family Feud. Her portion of the winnings was \($4,000\) cash and a car with a fair market value of \($32,000.\) Does Delilah have to include these...
Study smarter with the SolutionInn App