Part A Company Takeover Jason Mathers has been writing software apps for the last few years...

  

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Part A Company Takeover Jason Mathers has been writing software apps for the last few years on a part-time basis and now Apps Plus wish to take over his business. An extract from his business's trial balance before the takeover appears below: Trial Balance as at 30 September 2013 (Extract) S 14,000 12,000 Accounts Receivable Office Furniture Office Equipment Bank 20,000 10,000 Allowance for Doubtful Debts Accumulated Depreciation on Office Furniture Accumulated Depreciation on Office Equipment GST Payable Accounts Payable Loan 7 Marks • The agreed value for Accounts Receivable is $12,000. • GST payable is not to be taken over. The agreed value for the Office Equipment is $15,000. $ 1,000 8,400 4,200 5,300 6,000 10,000 The Takeover Agreement states that Apps Plus will take over all the assets and liabilities of Jason's business at carrying amount, except for the following: Jason's business will be taken over for $40,000. The consideration for Jason's business will be as follows: • 10,000 $3 shares to be issued on 1 October 2013. • The balance to be paid in cash on 30 November 2013. Required: Prepare the General Journal entries to record the takeover and the settlement. Dates must be shown but narrations are not required. Date Particulars Apps Plus General Journal Debit Credit (7 Marks) Part A Company Takeover Jason Mathers has been writing software apps for the last few years on a part-time basis and now Apps Plus wish to take over his business. An extract from his business's trial balance before the takeover appears below: Trial Balance as at 30 September 2013 (Extract) S 14,000 12,000 Accounts Receivable Office Furniture Office Equipment Bank 20,000 10,000 Allowance for Doubtful Debts Accumulated Depreciation on Office Furniture Accumulated Depreciation on Office Equipment GST Payable Accounts Payable Loan 7 Marks • The agreed value for Accounts Receivable is $12,000. • GST payable is not to be taken over. The agreed value for the Office Equipment is $15,000. $ 1,000 8,400 4,200 5,300 6,000 10,000 The Takeover Agreement states that Apps Plus will take over all the assets and liabilities of Jason's business at carrying amount, except for the following: Jason's business will be taken over for $40,000. The consideration for Jason's business will be as follows: • 10,000 $3 shares to be issued on 1 October 2013. • The balance to be paid in cash on 30 November 2013. Required: Prepare the General Journal entries to record the takeover and the settlement. Dates must be shown but narrations are not required. Date Particulars Apps Plus General Journal Debit Credit (7 Marks)

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Working Note 1 Statement showing Assets taken over and liabilities assumed Particulars Assets taken ... View the full answer