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Consolidation: non-controlling interest (NCI) Partial goodwill method **Prepare the business combination valuation entries and pre-acquisition entry...

Consolidation: non-controlling interest (NCI)
Partial goodwill method
**Prepare the business combination valuation entries and pre-acquisition entry at acquisition date.

Laura Ltd purchased 97% of the issued shares of Chris Ltd for $1,759,000 on 1 July 2018 when the equity of Chris Ltd was as follows;

Share capital

$703,600

Asset Revaluation surplus

$527,700

Retained earnings

$263,850

At this date, Chris Ltd had not recorded any goodwill, and all identifiable assets and liabilities were recorded at fair value except for the followings;

Account

Cost

Carrying Amount

Fair value

Further Life (Years)

Inventories

$52,800

$58,100

Land

$132,000

$145,000

Equipment

$205,000

$164,000

$197,000

8

Chris Ltd identified at acquisition date a contingent liability related to a lawsuit where Chris Ltd was sued by a former supplier

$21,000

Chris Ltd had unrecorded and internally generated Patent with the fair value of :

$53,000

Chris Ltd had unrecorded and internally generated in-process research and development with the fair value of :

$40,000

60% of inventory on hand at 1 July 2018 were sold by 20 June 2019. Further life of the assets is listed on the above table. Partial goodwill method is under use and the tax rate is 30%

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