Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on 1 july 2020, kerry ltd acquired 100% of the iss

On 1 July 2020, Kerry Ltd acquired 100% of the issued shares of James Ltd...

70.2K

Verified Solution

Question

Accounting

On 1 July 2020, Kerry Ltd acquired 100% of the issued shares of James Ltd on a cummulative dividend basis. The fair value of the consideration paid was measured at $250,000. At this date, the records of James Ltd included the following information: Share Capital $200,000 Retained Earnings $20,000 Asset Revaluation reserve $5,000 Dividends payable $5,000 Goodwill $2,000 The dividend liability at 1 July 2020 was paid in September 2020. At 1 July 2020, all the identifiable assets and liabilities of James Ltd were recorded in the subsidiarys books at fair value except for the following assets: Carrying Amount Fair Value Inventory $40,000 $46,000 Property and Equipment $100,000 $115,000 The inventory was all sold by 30 June 2021. The Property and equipment has a further 5-year life and is depreciated on a straight-line basis. Goodwill was not impaired in any period. When assets are sold or fully consumed, any relating business combination valuation reserve is transferred to retained earnings. The tax rate is 30%.

Part A: Prepare Acquisition analysis as at 1 July 2020

Part B: Prepare the pre-acquisition entries at 30 June 2021.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Why do managers examine benchmarks? How can benchmarks be applied to some of the analytic techniques?

Basic Math
Q

Find a primitive root for: (a) n = 18, (b) n = 50 (c) n...

Advance Math
Q

48. A therapy that targets HIV’s p24 protein would be most effective: A) During reverse transcriptase in...

Medical Sciences
Q

Please discuss the 4 elements of the life cycle of a business venture and please provide...

Finance
Q

The chart below shows the inheritance of human eye color AABB AABD A00 Aso Asto...

Biology
Q

Listen Loose connective tissue has a lot of ground substance In contrast dense connective tissues...

Biology
Q

Select the function that represents a parabola with vertex at (2,1) and y-intercept (0,3).A) f(x)...

Basic Math
Q

my choice is incorrecf Thomson Corporation owns 70 percent of...

Accounting
Q

On December 31, 2019, Kingbird Corporation signed a 6-year, non-cancelable lease for a machine. The...

Accounting
Q

Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. Data...

Accounting
Q

need to check my work QTY Jul. 1 ...

Accounting
Q

Actually do the question and explain it. Please do not copy other Chegg question. ...

Finance