Part B &nb
Part B [5 marks]
On 1 July 2018, Gedolf Ltd acquired all the issued shares of Bob Ltd for $148,000. At this date the equity of Bob Ltd was recorded as follows:
|
Capital |
$80,000 |
|
General Reserve |
$30,000 |
|
Retained Earnings |
$40,000 |
All the identifiable assets and liabilities were recorded at amounts equal to their fair
values.
Required
Prepare the consolidation worksheet journal entries for Gedolf Ltd Group at 1 July 2018.
Homework Answers
| (In $) | (In $) | (In $) | ||
| DATE | PARTICULARS | |||
| 01-Jul-18 | TOTAL VALUE OF ASSETS ON THE DATE OF ACQUISITION | |||
| I.E. 80000+30000+40000 | 150000 | |||
| Consideration Paid | 148000 | |||
| Bargain Purchase (Negative Goodwill) | 2000 | |||
| Journal Entries | ||||
| 01-Jul-18 | Business Acquiring valuation reserve | Dr | 2000 | |
| Negative Goodwill | Cr | 2000 | ||
| 01-Jul-18 | Capital | Dr | 80000 | |
| General Reserve | Dr | 30000 | ||
| Retained Earnings | Dr | 40000 | ||
| Business Acquiring valuation reserve | Cr | 2000 | ||
| Shares in Bob Ltd | Cr | 148000 |
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