Consolidation of Financial Statement

Running head: CONSOLIDATION OF FINANCIAL STATEMENT
Consolidation of Financial statement
Name of the Student:
Name of the University:
Author’s Note:

1CONSOLIDATION OF FINANCIAL STSTEMENT
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................3
Answer to question 3:.................................................................................................................4

2CONSOLIDATION OF FINANCIAL STSTEMENT
Answer to question 1:
Date Name of Accounts Amount Amount
01-Jul-15 Investment in Range Pty Ltd $ 1,24,00,000
Shar Capital $ 96,00,000
Cash $ 28,00,000
(To record investment in Range Pty Ltd)
01-Jul-17 Investment in Swith Works Ltd $ 36,00,000
Other Acquistion expenses $ 1,00,000
Cash $ 37,00,000
(To record investment in Swift Works
Ltd)
Acquisition analysis of Range Pty Ltd
Ordinary share capital $ 20,00,000
Preference share capital $ 10,00,000
General Reserve $ 10,00,000
Retained Earnings $ 15,00,000
Total value of assets as on 1 July 15 $ 55,00,000
Fair Value Adjustments:
Obsolesce of Inventory $ -5,00,000
Fair value appreciation of land $ 10,00,000
Impairment of PPE $ -6,75,000
Patent $ 15,000
Total Fair value adjustment $ -1,60,000
Net Book Value of assets of Swift Pty Ltd $ 53,40,000
Shares issued $ 96,00,000
Cash paid $ 28,00,000
Total Purchase consideration $ 1,24,00,000
Value of Goodwill $ 70,60,000
Acquisition analysis of Swift Works Limited:
Share Capital $ 25,00,000
General Reserve $ 2,80,000
Retained Earnings $ 11,00,000
Value of total assets $ 38,80,000
Purchase consideration $ 36,00,000