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ACC705 Accounting Assignment- Sam Ltd

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Accounting Assignment (ACC705)

   

Added on  2020-02-19

ACC705 Accounting Assignment- Sam Ltd

   

Accounting Assignment (ACC705)

   Added on 2020-02-19

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Solution 1Net fair value of identifiable assets and liabilities of Sam LtdParticularsAmountShare Capital 100,000 Reserves 5,000 Retained Earnings 10,000 Plant (2000 (1 - 30%)) 1,400 Land (5000 (1 - 30%)) 3,500 Inventory (4000 (1 - 30%)) 2,800 Databases (6000 (1 - 30%)) 4,200 Damages payable (-10000 x (1 - 30%))- 7,000 Goodwill- 5,000 Net fair value 114,900 Calculation of consideration paidParticularsAmountConsideration paid 123,500 Less: Dividend receivable- 6,000 Net Consideration paid 117,500 Calculation of GoodwillParticularsAmountNet Consideration paid 117,500 Net fair value 114,900 Goodwill 2,600 Recorded already goodwill 5,000 Goodwill to be reversed- 2,400 Worksheet entries at 30 June 2017:Business combination valuation entriesParticularsDr./Cr.Amount (Dr.)Amount (Cr.)Accumulated depreciation - Plant A/cDr. 26,000 To Plant A/c 24,000 To Deferred tax liability A/c 600To BCVR A/c 1,400 Depreciation expense A/cDr. 200To Retained earnings A/c (01/07/2016)Dr. 600To Accumulated depreciation A/c (1/10 x 2000 x 4) 800Deferred tax liability A/cDr. 240To Income tax expense A/c 60To Retained earnings A/c (01/07/2016) 180Amortisation Expense - Databases A/cDr. 1,500Retained earnings A/c (01/07/2016)Dr. 3,150To Transfer from BCVR A/c 4,200
ACC705 Accounting Assignment- Sam Ltd_1
To Income tax expense A/c 450Transfer from BCVR A/cDr. 7,000Income tax expense A/cDr. 3,000To Damages expense A/c 7,500 To Profit A/c 2,500 Accumulated impairment losses - Goodwill A/cDr. 7,000BCVR A/cDr. 2,400To Goodwill A/c 9,400 Pre-acquisition entriesat 1st July-2013:ParticularsDr./Cr.Amount (Dr.)Amount (Cr.)Retained earnings A/c (01/07/2013)Dr. 10,000 Share Capital A/cDr. 100,000 Reserves A/cDr. 5,000BCVR A/cDr. 2,500To Shares in Sam Ltd. A/c 117,500 Dividend Payable A/cDr. 6,000To Dividend Receivable A/c 6,000 at 30th June-2017:ParticularsDr./Cr.Amount (Dr.)Amount (Cr.)Retained earnings A/c (01/07/2016)Dr. 19,300 Share Capital A/cDr. 100,000 Reserves A/cDr. 2,000To BCVR A/c 3,800 To Shares in Sam Ltd. A/c 117,500 Transfer from Reserves A/cDr. 2,000To Reserves A/c 2,000 BCVR A/cDr. 7,000To Transfer from BCVR A/c 7,000 Transfer from BCVR A/cDr. 4,200To BCVR A/c 4,200
ACC705 Accounting Assignment- Sam Ltd_2

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