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For the following case provide all:
b) accounting standards
c) related journal entries
d) relevant explanations
On 1 July 2019 Alma Ltd acquired 91% the issued shares of Davis Ltd for $1010000 . The equity of Davis Ltd at this date consisted of:
i 11801658 at 05/09/2019 12:51:34 A4 (dflc9682df93b039c5Ofead207e44f6e)
Share capital 354000
General reserve 152000
Asset revaluation surpluss 121000
All the identifiable assets and liabilities of Davis Ltd were recorded at amounts equal to their fair values at acquisition date except for the following;
Carrying Fair value Further life- in
Amount I I Year
All inventories on hand at 1 July 2019 are sold by 30 June 2020. Further life of the assets are listed on the above table. Alma Ltd uses the partial goodwill method.
1- Prepare the acquisition analysis at acquisition date.
2- Prepare the business combination valuation entries and pre-acquisition entry at acquisition date.
3- Prepare the journal entry to recognise NCI at acquisition date.
4-Prepare the consolidation worksheet entries at 30 June 2020. Assume a profit for Davis Ltd for the year ended 30 June 2020 of 520000.
5- Explain how the step 1 to 4 will change if the full goodwill method is used.
$425,000 $354,000 $637,000
$20,000 $20,000 5
Inventories Land Machinery Fittings Liabilities