Question 1 On 1 July 2016, P Ltd acquired 100% of the share capital of S...

 

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Question 1 On 1 July 2016, P Ltd acquired 100% of the share capital of S Ltd for $600,000. On that date, the shareholders' equity of S Ltd consisted of share capital and retained earnings which were: Share Capital (85,000 shares) Retained Earnings $340,000 $150,000 At 1 July 2016, all the assets and liabilities of S Ltd were recorded at amounts equal to fair value except for land and plant. Land had a carrying amount of $240,000 and a fair value of $290,000. Plant had a fair value of $100,000 and a carrying amount of $50,000 (original cost $200,000). Land was sold on 31 December 2018. The remaining useful life of the plant at date of acquisition is 5 years. The tax rate is 30%. P Ltd satisfied the requirements of AASB 10 regarding capacity to control S Ltd during the required period, and applies the partial goodwill method. Required Prepare consolidation adjustments, in consolidation journal form according to AASB 10 Consolidated Financial Statements as at 30 June 2019. (25 marks) Question 1 On 1 July 2016, P Ltd acquired 100% of the share capital of S Ltd for $600,000. On that date, the shareholders' equity of S Ltd consisted of share capital and retained earnings which were: Share Capital (85,000 shares) Retained Earnings $340,000 $150,000 At 1 July 2016, all the assets and liabilities of S Ltd were recorded at amounts equal to fair value except for land and plant. Land had a carrying amount of $240,000 and a fair value of $290,000. Plant had a fair value of $100,000 and a carrying amount of $50,000 (original cost $200,000). Land was sold on 31 December 2018. The remaining useful life of the plant at date of acquisition is 5 years. The tax rate is 30%. P Ltd satisfied the requirements of AASB 10 regarding capacity to control S Ltd during the required period, and applies the partial goodwill method. Required Prepare consolidation adjustments, in consolidation journal form according to AASB 10 Consolidated Financial Statements as at 30 June 2019. (25 marks)

Answer rating: 100% (QA)

Land 290000 Plant 50000 Share Capital 340000 Reta... View the full answer