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Question #2: Liu Limited purchased all outstanding ordinary shares of Yang Plastics, Ltd. on December 31, 2017. Just before the purchase, condensed statements of financial position of the two companies were as follows.

		Lui Limited		Yang Plastics
Plant and equipment (net)		2,100,000		676,000
Current assets		1,480,000		435,500
		3,580,000		1,111,500
Share capitalordinary		1,950,000		525,500
Retained earnings		1,052,000		494,000
Current liabilities		578,000		92,500
		3,580,000		1,111,500

Liu used current assets of 1,228,750 to acquire the shares of Yang Plastics. The excess of this purchase price over the book value of Yang Plastics' net assets is determined to be attributable 84,000 to Yang Plastics' plant and equipment and the remainder to goodwill.

Instructions:

Prepare the entry for Liu Limited's acquisition of Yang Plastics, Ltd. Shares (using journal below).

Prepare a consolidated worksheet at December 31, 2017 (using template below).

Prepare a consolidated statement of financial position at December 31, 2017 (using template below).

(a) GENERAL JOURNAL
Dec.	Account Title	Debit	Credit

.

(b) LIU LIMITED AND SUBSIDIARY WorksheetConsolidated Statement of Financial Position December 31, 2017
Assets		Liu Limited		Yang Plastics		Eliminations Debit		Eliminations Credit		Consolidated Data
Plant and Equipment (net) ..
Investment in Yang Plastics ordinary shares
Current assets
Excess of cost over book value of subsidiary ..
Totals
Equity and liabilities
Share capitalLiu Limited
Share capitalYang Plastics
Retained earningsLiu Limited ..
Retained earningsYang Plastics ..
Current liabilities ..
Totals

(c) LIU LIMITED AND SUBSIDIARY Consolidated Statement of Financial Position December 31, 2017
Assets
Goodwill
Plant and equipment, net .
Current assets
Total Assets
Equity and Liabilities
Equity ..
Share capitalordinary .
Retained earnings .
Current liabilities .
Total equity and liabilities

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