corporate accounting assignment Consolidation worksheet, consolidated financial statements… 1 answer below »

Ghostbusters Ltd acquired all the shares of Bat Ltd for $305 000 on an ex-div. basis. On this date, the equity and liabilities of Bat Ltd included the following balances:
Share capital $ 200 000 General reserve 25 000 Retained earnings 45 000 Dividend payable 10 000 Provisions 169 500
At acquisition date, all the identifiable assets and liabilities of Bat Ltd were recorded at amounts equal to fair value except for:
Carrying amount Fair value Plant and equipment (cost $300000) $188000 $190000 Trademark 100000 110000 Inventories 70000 80000 Land 50000 70000 Goodwill 25000 55000 Machinery (cost $18000) 15000 113000
Goodwill was not impaired in any period. The plant and equipment had a further 5-year life at acquisition date and was expected to be used evenly over that time. The trademark was considered to have an indefinite life. The machinery, which was estimated to have a further 4-year life at acquisition date, was sold on 1 January 2020. Any adjustments for differences between carrying amounts at acquisition date and fair values are made on consolidation.
During the year ended 30 June 2019, all inventories on hand at acquisition date were sold, and the land was sold on 1 June 2020. Any valuation reserves created are transferred on consolidation to retained earnings when assets are sold or fully consumed.
Additional information (a) Of the interim dividend paid by Bat Ltd in the current year, $5000 was from profits before acquisition date. All other dividends were from current year profits. Shareholder approval is not required in relation to dividends. (ill On 1 July 2019. Rat Ltd hac on hand inventory worth


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