The followings are the financial information of Parent and Daughter pre-acquisition date. Parent Ltd Daughter Ltd...

 

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The followings are the financial information of Parent and Daughter pre-acquisition date. Parent Ltd Daughter Ltd 20,000 Cash Other net assets 20,000 25,000 45,000 40,500 8,800 Net assets Ordinary shares of £1 each Retained earnings Total equity 10,800 9,000 1,800 10,800 4,500 45,000 On 1 January 20XX Parent Ltd acquired all the ordinary shares in Daughter Ltd for £10,800 cash. The fair value of the net assets in Daughter Ltd was their book value. Required: a) Prepare the statement of financial position of Parent Ltd reflecting the acquisition of Daughter Ltd as at 1 January 20XX. b) Prepare the consolidated statement of financial position of Parent Ltd at 31st December 20XX. The followings are the financial information of Parent and Daughter pre-acquisition date. Parent Ltd Daughter Ltd 20,000 Cash Other net assets 20,000 25,000 45,000 40,500 8,800 Net assets Ordinary shares of £1 each Retained earnings Total equity 10,800 9,000 1,800 10,800 4,500 45,000 On 1 January 20XX Parent Ltd acquired all the ordinary shares in Daughter Ltd for £10,800 cash. The fair value of the net assets in Daughter Ltd was their book value. Required: a) Prepare the statement of financial position of Parent Ltd reflecting the acquisition of Daughter Ltd as at 1 January 20XX. b) Prepare the consolidated statement of financial position of Parent Ltd at 31st December 20XX.

Answer rating: 100% (QA)

2 Please note that the asset section of Daughter Ltd cash is errone... View the full answer