Tan Ltd acquired 60% of the issued share capital of Smith Ltd on 1 February 20X1....

Transcribed Image Text:

Tan Ltd acquired 60% of the issued share capital of Smith Ltd on 1 February 20X1. Smith Ltd's shareholders equity (all at fair value) at that date was as follows: $000s Paid up capital Retained profits Asset revaluation reserve 2,000 If Tan Ltd paid $4,000,000 for this acquisition what is the elimination entry if consolidated financial statements were prepared on 1 February 20X1? Use the partial goodwill method. 4,000 1,000 Tan Ltd acquired 60% of the issued share capital of Smith Ltd on 1 February 20X1. Smith Ltd's shareholders equity (all at fair value) at that date was as follows: $000s Paid up capital Retained profits Asset revaluation reserve 2,000 If Tan Ltd paid $4,000,000 for this acquisition what is the elimination entry if consolidated financial statements were prepared on 1 February 20X1? Use the partial goodwill method. 4,000 1,000

Answer rating: 100% (QA)

Under the partial goodwill method the acquiring company recognizes only its share of the fair value ... View the full answer