Question 4 (10 marks) On July 1 2021, Sunflower Ltd acquired 60% of share capital of...

  

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Question 4 (10 marks) On July 1 2021, Sunflower Ltd acquired 60% of share capital of Lilly Ltd for $60,000,000. Equity of Lilly Ltd at acquisition date was: Share capital $ 54,000,000 $ 12,000,000 $ 6,000,000 General reserve Retained earnings All assets of Lilly Ltd were recorded at fair value on acquisition except for an item of machinery that had a higher fair value ($1500,000) than its carrying amount. Cost of equipment was $15,000,000 with an accumulated depreciation of $9,000,000. Required: Complete the worksheet below using the NET method. Elimination of Investment in Lilly Ltd Fair Value of consideration transferred Less: FV of identifiable assets acquired & liabilities assumed Share capital on acquisition date General reserve-acquisition date Retained earnings-acquisition date Fair value adjustment Goodwill on acquisition Non-controlling interest Lilly Ltd (S) $,000 54,000 12,000 6,000 Sunflower Ltd (60% of Lilly (P) $,000 40% NCI $,000 Question 4 (10 marks) On July 1 2021, Sunflower Ltd acquired 60% of share capital of Lilly Ltd for $60,000,000. Equity of Lilly Ltd at acquisition date was: Share capital $ 54,000,000 $ 12,000,000 $ 6,000,000 General reserve Retained earnings All assets of Lilly Ltd were recorded at fair value on acquisition except for an item of machinery that had a higher fair value ($1500,000) than its carrying amount. Cost of equipment was $15,000,000 with an accumulated depreciation of $9,000,000. Required: Complete the worksheet below using the NET method. Elimination of Investment in Lilly Ltd Fair Value of consideration transferred Less: FV of identifiable assets acquired & liabilities assumed Share capital on acquisition date General reserve-acquisition date Retained earnings-acquisition date Fair value adjustment Goodwill on acquisition Non-controlling interest Lilly Ltd (S) $,000 54,000 12,000 6,000 Sunflower Ltd (60% of Lilly (P) $,000 40% NCI $,000

Answer rating: 100% (QA)

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