(a) Explain the ways in which a company may expand by
obtaining new assets. (1 mark)...
(a) Explain the ways in which a company may expand by
obtaining new assets. (1 mark)
(b) Jamuna River Ltd purchased a parcel of assets and
liabilities comprising a business directly from Lyneham Pty Ltd.
The parcel of assets, measured at net fair value, consisted
of:
Balance of Accounts:
Plant
Land
Vehicles
Accounts receivable Accounts payable Total
($)___
150,000 240,000 120,000
30,000 (48,000) 492,000
2
Question 3 (Cont’d) Required:
Prepare journal entries to record the acquisition by Jamuna
River Ltd,...
On 1 July 2019, Quick Buck Ltd took control of the assets and
liabilities of Eldorado...
On 1 July 2019, Quick Buck Ltd took control of the assets and
liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares
having a fair value of $2.40 per share in exchange for the net
assets of Eldorado Ltd. The costs of issuing the shares by Quick
Buck Ltd cost $1,600. At this date the statement of financial
position of Eldorado Ltd was as follows: Carrying amount Fair value
Machinery $40,000 $67,000 Fixtures & fittings 60,000 68,000
Vehicles 35,000...
20. Big Ltd acquired all the assets and liabilities of Small Ltd
on 1 July 2019....
20. Big Ltd acquired all the assets and liabilities of Small Ltd
on 1 July 2019. At this date, the assets and liabilities of Rod Ltd
consisted of the following:
Carrying Amount ($)
Fair Value($)
Assets
Cash
250,000
600,000
Accounts receivable
450,000
500,000
Land
200,000
300,000
Vehicle
100,000
200,000
Accumulated depreciation -Vehicle
(20,000)
Liabilities
Accounts payable
150,000
150,000
Loans
200,000
200,000
Equity
Share Capital –@$6 per share
600,000
Reserves
30,000
In exchange for these assets and liabilities, Big Ltd...
On 1 July 2020, Sydney Ltd took control of the assets and
liabilities of Perth Ltd....
On 1 July 2020, Sydney Ltd took control of the assets and
liabilities of Perth Ltd. At this date the statement of financial
position of Perth Ltd was as follows:
Carrying
amount Fair
value
Machinery $40,000 $67,000
Fixtures
&
fittings 60,000 68,000
Vehicles 35,000 35,000
Current
assets 10,000 12,000
Current
liabilities (16,000) (18,000)
Total net
assets $129,000
Share
capital (80 000 shares at $1.00 per
share) 80,000
General
reserve 20,000
Retained
earnings 29,000
Total
equity $129,000
Prepare the journal entries in the records of Sydney Ltd at 1
July 2020 in the following situation, assuming the...
Flashy Ltd is involved in the manufacture of Ugg boots. The
director wishes to sell the...
Flashy Ltd is involved in the manufacture of Ugg boots. The
director wishes to sell the business to a long-standing competitor,
Boots Ltd. The financial statements of Flashy Ltd at 1 July 2019
contained the following information:
Assets
Current assets
Cash
7,500
Accounts receivable
11,000
Inventories
16,500
Total current assets
35,000
Non-current assets
Vehicles
32,000
Accumulated depreciation
(5,500)
Trucks
37,000
Accumulated depreciation
(6,300)
Machinery
22,000
Accumulated depreciation
(3,000)
Buildings
49,000
Accumulated depreciation
(4,500)
Land
90,000
Total non-current assets
210,700...
Justice Ltd acquired all the assets except cash of League Ltd on
1 July 2018. On...
Justice Ltd acquired all the assets except cash of League Ltd on
1 July 2018. On this date, the statement of financial position
contained the following accounts:
Assets
Current assets
Cash
12,000
Accounts receivable
28,840
Inventory
24,880
Non-current assets
Buildings
200,000
Accumulated depreciation - building
(40,000)
Fixtures
60,000
Accumulated depreciation - fixtures
(20,000)
Plant and equipment
60,000
Accumulated depreciation - plant and equipment
(14,200)
Goodwill
1,800
Total assets
313,320
Liabilities
Current liabilities
Accounts payable
32,600
Non-current liabilities
Guarantees
31,000
Loans...
On 1 July 2019, Adelaide Ltd acquired 75% of the issued
shares of Canberra Ltd for...
On 1 July 2019, Adelaide Ltd acquired 75% of the issued
shares of Canberra Ltd for $720,000. At this date, the equity of
Canberra Ltd consisted of share capital of $400,000 and retained
earnings of $210,000. All the identifiable assets and liabilities
of Canberra Ltd were recorded at amounts equal to fair value except
for the following.
Carrying Amount
Fair value
Machine (cost $50,000)
20,000
24,000
Plant (cost $400,000)
200,000
280,000
Inventories
50,000
66,000...
Hahndorf Ltd acquired 100% of the shares of Sarina Ltd on 1 July
2015 for $700,000,...
Hahndorf Ltd acquired 100% of the shares of Sarina Ltd on 1 July
2015 for $700,000, when the equity of Sarina Ltd consisted of:
Share
Capital
$500,000
General
Reserve
80,000
Retained
Earnings
30,000
All identifiable assets and liabilities of Sarina Ltd were
fairly valued at acquisition except the machinery, which had a fair
value of $140,000. The machinery had a further 7-year life with
depreciation based on the straight-line method.
Selected financial information of the two entities as at 1...
The accounting records of Swan Ltd recorded the following
information.
30-Jun-19
30-Jun-20
Accounts receivable
50,000
30,000...
The accounting records of Swan Ltd recorded the following
information.
30-Jun-19
30-Jun-20
Accounts receivable
50,000
30,000
Inventories
87,000
70,000
Prepaid expenses
40,000
30,000
Dividend receivable
21,000
23,000
Land
490,000
1,000,000
Property
4,000,000
4,000,000
Accounts payable for inventories purchased
70,000
80,000
Bills payable
40,000
44,000
Employee benefit liabilities
59,000
42,000
Provision for warranty
40,000
30,000
Debenture
100,000
400,000
Sales revenue
3,800,000
5,000,000
Dividend revenue
28,000
60,000
Depreciation expense
320,000
350,000
Cost of sales
3,900,000
3,500,000
Warranty expenses
80,000
100,000
Other operating...
Hahndorf Ltd acquired 100% of the shares of Sarina Ltd on 1 July
2015 for $700,000,...
Hahndorf Ltd acquired 100% of the shares of Sarina Ltd on 1 July
2015 for $700,000, when the equity of Sarina Ltd consisted of:
Share
Capital
$500,000
General
Reserve
80,000
Retained
Earnings
30,000
All identifiable assets and liabilities of Sarina Ltd were
fairly valued at acquisition except the machinery, which had a fair
value of $140,000. The machinery had a further 7-year life with
depreciation based on the straight-line method.
Selected financial information for both companies at 30 June
2018...