Question

On 1 July 2023, Gordon Ltd acquired all the issued shares (cum div.) of Henry Ltd...

On 1 July 2023, Gordon Ltd acquired all the issued shares (cum div.) of Henry Ltd for $528000.
At that date, the financial statements of Henry Ltd showed the following information.
Share capital 220000
General reserve 110000
Retained earnings 154000
Dividend payable 44000
All the assets and liabilities of Gordon Ltd were recorded at amounts equal to their fair
values at the acquisition date. The dividend payable reported at 1 July 2023 by Henry Ltd
was paid on 15 August 2023. Henry Ltd paid a further dividend of $55000 on 2 February 2024

from post-acquisition profits.

2. Prepare the consolidation worksheet entries for Gordon Ltd's group at 1 July 2023.

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Answer #1
Date General Journal Debit Credit
1 July 2023 Retained earnings (1/7/23)       154,000
Share Capital       220,000
General Reserve       110,000
Shares in Henry Ltd 484,000
1 July 2023 Dividend payable         44,000
Dividend receivable     44,000
Working
FVINA acquired       484,000
(220,000 + 110,000 + 154,000)
Consideration transferred       484,000
(528,000 - 44,0000)
Goodwill               -  
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