Journal of Accounting and Finance

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Name of the Student:
Name of the University:
Author’s Note:

CORPORATE ACCOUNTING1
Table of Contents
Answer to question 1:......................................................................................................................2
Answer to question 2:......................................................................................................................2
Answer to question 3:......................................................................................................................3
Answer to question 4:......................................................................................................................3
Workings:....................................................................................................................................4
Answer to question 5:......................................................................................................................5
References and bibliography:..........................................................................................................7

CORPORATE ACCOUNTING2
Answer to question 1:
Acquisition analysis as at 1 July 2019:
Share capital $ 787,000
Assets revaluation surplus $ 337,000
Retained earnings (1/7/19) $ 270,000
Fair value adjustment:
Inventories (607000-337000)*(1-30%) $ 189,000
Land (1213000-674000)*(1-30%) $ 377,300
Furniture (1417000-787000)*(1-30%) $ 441,000
Fittings (36300-33150)*(1-30%) $ 2,205
Liabilities -50000*(1-30%) $ (35,000)
Fair value of net identifiable assets $ 2,368,505
Less: NCI interest in equity
(2368505*8%) $ 189,480
Equity attributable to the Ethan Ltd. $ 2,179,025
Purchase consideration transferred $ 2,248,000
Value of goodwill on acquisition $ 68,975
Answer to question 2:
Business combination valuation entries as at 1 July 2019:
Inventories $
270,000
Land $
539,000
Furniture $
630,000
Fittings $
3,150
Deferred tax assets $
15,000
Contingent Liability $ 50,000
Deferred tax liability $ 432,645
Business Combination Valuation Reserve $ 974,505
(BCVR entry for fair value adjustment)
Share capital $
787,000
Assets revaluation surplus $