Solution
Riddhi answered on
Sep 17 2021
As per AASB 10, Consolidated financial statements is to be presented by Parent company. Parent company is not required to present consolidated financial statement in case the parent company is wholly or partially owned subsidiary of another company or the equity of the parent company is not traded in the financial markets or the parent company is required to comply with IFRS.
1. Prepare Acquisition analyses at Acquisition date
Particulars
Amt($)
Net Fair value of Identifiable Assets
$18,77,650
(-) Unrecorded Liability
$27,000
(+) Unrecorded Patent
$66,000
(+) Unrecorded R&D
$50,000
Net Fair value of Identifiable Assets
$19,66,650
BCVR - Inventory
$4,620
BCVR - Land
$11,900
BCVR - Vehicle
$28,700
FVINA
$20,11,870
Share of holding (97%)
$19,51,513.90
Cost of acquisition
$22,09,000
Goodwill
$2,57,486.10
2. Prepare business combination valuation entries and pre acquisition entry at acquisition date
Journal Entries at Acquisition Date
BCVR Entries
Inventories Dr $6,600
To DTL $1,980
To BCVR $4,620
Land Dr $17,000
To DTL $5,100
To BCVR $11,900
Accumulated Depreciation Dr $51,250
To Vehicle $10,250
To DTL $12,300
To BCVR $28,700
Goodwill Dr $2,57,486
To BCVR $2,57,486
Pre-acquisition Entry
Retained earnings Dr $6,42,819
Share Capital Dr $8,57,092
General reserve Dr $3,21,410
BCVR Dr $2,98,679
Patent Dr $66,000
R & D Dr $50,000
To shares in Rex Ltd $22,09,000
To Contingent Liability $27,000
3. Prepare the Journal Entry to recognise NCI at acquisition date
Sam Ltd
Rex Ltd
a)
Issued capital
Direct NCI 3%
$8,83,600
$26,508
b)
Retained Earnings
Direct NCI 3%
$6,62,700
$19,881
c)
General Reserve
Direct NCI 3%
$3,31,350
$9,940
NCI Equity
a)
Retained earnings D
Share capital D
General Reserve D
To NCI
$19,881
$26,508
$9,940
$56,329
NCI Share of Profit on 30th June, 2020
NCI Share of profit D
To NCI
$94,947
$94,947
4. Prepare Consolidated worksheet entries on 30th June...