Consolidation Worksheet Entries and Acquisition Analysis for Desklib Online Library

Index
Solution-1....................................................................................................................................................1
Solution-2....................................................................................................................................................6
Solution-3....................................................................................................................................................7

Solution-1
1. Acquisition analysis
Amount (in $)
Share Capital 80,000.00
Retained Earnings 29,600.00
General Reserve 2,400.00
Excess of fair value over carrying value:
Inventories 2,100.00
Plant 2,800.00
Land 3,500.00
Unrecorded Customer List 12,600.00
Fair value of identifiable assets & liabilities acquired 133,000.00
% of shares acquired 80%
Consideration paid 115,000.00
Non-controlling interest 28,000.00
Aggregate 143,000.00
Goodwill 10,000.00
Goodwill of Soda Ltd.
Fair value 140,000.00
Fair value of identifiable assets & liabilities acquired of Soda Ltd. 133,000.00
Goodwill of Soda Ltd 7,000.00
Goodwill of Pepsi Ltd
Goodwill acquired 10,000.00
Goodwill of Soda Ltd 7,000.00
Goodwill of Pepsi Ltd - Control premium 3,000.00
2. Consolidation Worksheet Entries for the year ended 30 June, 2018
1. Business Combination Valuation Entries
Accumulated Depreciation Dr. 13,000.00
Plant Cr. 9,000.00
Deferred tax liability Cr. 1,200.00
BCVR Cr. 2,800.00
(Fair valuation of Plant)
Depreciation expense (4000/10*1) Dr. 400.00
Retained earnings (1/7/17) (4000/10*2) Dr. 800.00
Accumulated depreciation Cr. 1,200.00
(Recording depreciation)
Deferred tax liability Dr. 360.00
Income tax expense Cr. 120.00

Retained earnings (1/7/17) Cr. 240.00
(Recording income tax on depreciation)
Gain on sale of land Dr. 5,000.00
Income Tax expense Cr. 1,500.00
Transfer from BCVR Cr. 3,500.00
(Recording sale of land in the current year)
Unrecorded Customer List Dr. 18,000.00
Deferred tax liability Cr. 5,400.00
BCVR Cr. 12,600.00
(Record customer list at fair value)
Goodwill Dr. 7,000.00
BCVR Cr. 7,000.00
(Recording goodwill on acquisition)
2. Pre-Acquisition entry as on 31/7/18
Share Capital Dr. 64,000.00
Retained Earnings (1/7/17) Dr. 25,360.00
General Reserve Dr. 1,920.00
Goodwill Dr. 3,000.00
BCVR Dr. 20,720.00
Investment in Soda Ltd. Cr. 115,000.00
(Recording acquisition of subsidiary)
Transfer from BCVR Dr. 2,800.00
BCVR Cr. 2,800.00
(Recording transfer of amount -sale of land)
3. NCI share of equity at acquisition date (1/7/15)
Share Capital Dr. 16,000.00
Retained Earnings (1/7/17) Dr. 5,920.00
General Reserve Dr. 480.00
BCVR Dr. 5,600.00
NCI Cr. 28,000.00
(Recording share of NCI)
Retained Earnings (1/7/17) Dr. 1,588.00
General Reserve Dr. 1,120.00
Other components of equity Dr. 1,280.00
BCVR Cr. 420.00
NCI Cr. 3,568.00
(Recording NCI share in profits for 1/7/15 30/06/17)
NCI share of profit Dr. 2,824.00
NCI Cr. 2,824.00
(Recording NCI share in profit for 1/7/17 30/06/18)