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On 30 June 2023, Moon Ltd. paid $210,000 to buy all the shares of Sun...

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Accounting

On 30 June 2023, Moon Ltd. paid $210,000 to buy all the shares of Sun Ltd. On this date Sun Ltd. reported the following balances. Share capital $125,000 Retained earnings $40,000 General Reserve $90,000 On the date of acquisition, all the assets and liabilities of Sun Ltd. were at fair value, except a machine that was kept $50,000 above its fair value and a remaining useful life of 15 years. The residual value is $5,000 and Sun Ltd. had been depreciating this asset using the straight-line method. On 30 June 2023, the carrying amount of this machine was $120,000 and the accumulated depreciation was $20,000. Moon Ltd. and Sun Ltd. use the straight method for depreciation. The income tax rate is 30%.

Q1. Prepare the acquisition analysis on 30 June 2023.

Q2. Prepare all the relevant journal entries required for the consolidation worksheet on 30 June 2023.

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