Consolidation and Acquisition Entries, Equity Changes, and Foreign Exchange Transactions

Answer 1
Acquisition analysis
Share capital $ 80,000
Retained earnings $ 29,600
General reserve $ 2,400
Consumer list $ 12,600
Plant $ 2,800
Inventory $ 2,100
Land $ 3,500
Net fair value of net assets $ 133,000
Less:
Consideration $ 250,000
Fair value of NCI $ 28,000
Goodwill $ 145,000
Soda limited’s fair value $ 140,000
Net fair value of net assets $ 133,000
Soda limited’s goodwill $ 7,000
Goodwill $ 145,000
Soda limited’s goodwill $ 7,000
Pepsi -Control premium’s goodwill $ 138,000
Consolidation worksheet entries
BCVR entries
Plant Account Dr. $ 4,000
Deferred tax liability Account Cr. $ 1,200
BCVR Account Cr. $ 2,800
Depreciation expense Account Dr. $ 400
Retained earnings Account Dr. $ 800
Accumulated depreciation account Cr. $ 1,200
Deferred tax liability Account Dr. $ 360
Income tax expense Account Cr. $ 120
Retained earnings Account Cr. $ 240

Land Account Dr. $ 5,000
Deferred tax liability Account Cr. $ 1,500
BCVR Account Cr. $ 3,500
Consumer list Account Dr. $ 18,000
Deferred tax liability Account Cr. $ 5,400
BCVR Account Cr. $ 12,600
Goodwill Account Dr. $ 7,000
BCVR Account Cr. $ 7,000
Pre-acquisition entries
at 1 July 2015
Retained earnings Account Dr. $ 23,680
Goodwill Account Dr. $ 138,000
BCVR Account Dr. $ 22,400
Share capital Account Dr. $ 64,000
General reserve Account Dr. $ 1,920
Investment in Soda Account Cr. $ 250,000
at 30 June 2018
Retained earnings Account Dr. $ 25,360
Goodwill Account Dr. $ 138,000
Share capital Account Dr. $ 64,000
BCVR Account Dr. $ 20,720
General reserve Account Dr. $ 1,920
Investment in Soda Account Cr. $ 250,000
NCI share of equity at acquisition date
Share capital Account Dr. $ 16,000
General reserve Account Dr. $ 480
Retained earnings Account Dr. $ 5,920
BCVR Account Dr. $ 5,600
NCI Account Cr. $ 28,000

Changes in equity’s NCI share
Retained earnings Account Dr. $ 1,280
BCVR Account Cr. $ 420
NCI Account Cr. $ 860
NCI share of profit Account Dr. $ 2,880
NCI Account $ 2,880
NCI Account Dr. $ 1,600
Dividend paid Account Cr. $ 1,600
NCI Account Dr. $ 800
Dividend declared Account Cr. $ 800
Movements in fair value [OCE] Account Dr. $ 320
NCI Account Cr. $ 320
Dividend paid and declared
Dividend revenue Account Dr. $ 6,400
Dividend paid Account Cr. $ 6,400
Dividend revenue Account Dr. $ 3,200
Dividend declared Account Cr. $ 3,200
Dividend payable Account Dr. $ 3,200
Dividend receivable Account Cr. $ 3,200
Unrealized profit in inventory
Retained earnings Dr. $ 1,400
Income tax expenses Dr. $ 600
Cost of sale Cr. $ 2,000
Sales Dr. $ 48,000
Cost of sale Cr. $ 44,000
Inventory Cr. $ 4,000