Southern Cross Healthcare Group (SCHG) Southern Cross Healthcare Group (SCHG) is the parent company of a group
Question:
Southern Cross Healthcare Group (SCHG) Southern Cross Healthcare Group (SCHG) is the parent company of a group that designs and markets pharmaceutical products and systems for use in respiratory care, acute care, and the treatment of disruptive sleep behaviors. SCHG is based in New Zealand and its products and systems are sold locally as well as internationally.
The group includes a wholly- owned subsidiary Southern Cross Hospitals. The following are some major transactions that occurred during the financial year 01.01.2019 to 31.12.2019. A newly recruited accountant of SCHG is having concerns about how to account for those transactions. You have been asked to assist the accountant in correctly recording the transactions.
Transaction 2: SCHG acquired 100% of the shares of Southern Cross Hospitals on 01.01.2019 at a cost of $80,000,000. As at 31.12.2019, SCHG's share capital is recorded as $150 million. The statement of financial position for Southern Cross Hospitals at the date of acquisition is as follows.
Required:
1. Calculate the goodwill to be recorded in the consolidation balance sheet.
2. What is the amount of share capital to be recorded in the consolidated balance sheet?
3. During the year, SCHG Ltd sold a newly purchased Property Plant and Equipment (PPE) to Southern Cross Hospitals for $280,000 which had the cost of $200,000. The 580,000 gain on sale of the asset is included in the Retained Earnings of $16,000,000 for 2019 in the balance sheet of SCHG. For the year 2019, Southern Cross Hospitals provided $70,000 depreciation for this PPE. The rate of depreciation of Southern Cross Hospitals for PPE is 25% straight-line. Record the adjusting journal entries required for the consolidated financial statements. (Ignore the tax effects).
Business Research Methods
ISBN: 978-0073521503
12th edition
Authors: Donald R. Cooper, Pamela S. Schindler