Question

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 costs of issuing the shares by Sydney Ltd cost $1,600.

  1. Sydney Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Perth Ltd
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

PLEASE - - - - PLEASE KINDLY UP-VOTE. IT HELPS ME A LOT. THANK YOU IN ADVANCE.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
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...
On 1 July 2020, Harper Ltd acquired all of the assets and liabilities, which constitutes a...
On 1 July 2020, Harper Ltd acquired all of the assets and liabilities, which constitutes a business, from Jerry Ltd, except for cash and income tax payable. In exchange for the net assets, Harper Ltd agreed to: - issued 100,000 new shares in Harper Ltd to Jerry Ltd. On 1 July 2020, Harper Ltd’s shares were traded on the Australian Securities Exchange at $3.80 per share. - pay Jerry Ltd $80,000 on 1 July 2020 - transfer an item of...
Justice Ltd acquired all the assets except cash of League Ltd on 1 July 2018. On...
Justice Ltd acquired all the assets except cash of League Ltd on 1 July 2018. On this date, the statement of financial position contained the following accounts: Assets Current assets Cash 12,000 Accounts receivable 28,840 Inventory 24,880 Non-current assets Buildings 200,000 Accumulated depreciation - building (40,000) Fixtures 60,000 Accumulated depreciation - fixtures (20,000) Plant and equipment 60,000 Accumulated depreciation - plant and equipment (14,200) Goodwill 1,800 Total assets 313,320 Liabilities Current liabilities Accounts payable 32,600 Non-current liabilities Guarantees 31,000 Loans...
20. Big Ltd acquired all the assets and liabilities of Small Ltd on 1 July 2019....
20. Big Ltd acquired all the assets and liabilities of Small Ltd on 1 July 2019. At this date, the assets and liabilities of Rod Ltd consisted of the following: Carrying Amount ($) 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...
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...
Accounting by an acquirer ★ LO6 On 1 July 2023, Sonic Ltd acquired the following assets...
Accounting by an acquirer ★ LO6 On 1 July 2023, Sonic Ltd acquired the following assets and liabilities from Screwdriver Ltd. Carrying amount Fair value Land $600 000 $700 000 Plant (cost $800 000) 560 000 580 000 Inventories 160 000 170 000 Cash 30 000 30 000 Accounts payable (40 000) (40 000) Loans (160 000) (160 000) In exchange for these assets and liabilities, Sonic Ltd issued 200 000 shares that had been issued for $2.20 per share...
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...
On 1 July 2019, Alpha Ltd acquired 80% of the shares (ex div.) of Beta Ltd...
On 1 July 2019, Alpha Ltd acquired 80% of the shares (ex div.) of Beta Ltd for $285 000. The NCI owns the remaining 20% of the shares in Beta Ltd. At this date the shareholders’ equity of Suburb Ltd consisted of: Share capital $150 000 Retained earnings 75 000 General reserve 60 000 At this date, all the identifiable assets and liabilities of Suburb Ltd were recorded at amounts equal to their fair values except for the following: Carrying...
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...
Q) Bush Ltd acquired all the shares of Beach Ltd on 1 July 2018. Due diligence...
Q) Bush Ltd acquired all the shares of Beach Ltd on 1 July 2018. Due diligence work conducted by Bush Ltd revealed that all the assets and liabilities of Beach Ltd were carried at fair value at the date of acquisition, except for a contingent liability that has been assessed as a present obligation having a fair value of $80,000. The contingent liability was settled by Beach Ltd for $90,000 on 1 July 2019. Which of the following consolidation adjusting...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT