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CorporateAccounting
Table of ContentsMAIN BODY...................................................................................................................................3Part (a)..........................................................................................................................................3Part (b).........................................................................................................................................4
MAIN BODYPart (a)Correct acquisition analysis :Particulars$Fair value of identifiable net assets150000Share Capital8000RetainedEarning158000Fair Value purchased (75% x $158000)118500Purchase Consideration126000Goodwill7500Consolidation Journal Entries:DebitCredit$$(1) Elimination of investment in Robin LtdRetained EarningDr.6000Share Capital (150000*75%)Dr.112500GoodwillDr.7500Shares in Weiser Ltd126000(2) Goodwill impairmentOperating expenses(Goodwill Impairment loss)Dr.1500Accumulated impairment losses1500(3) Elimination of inter-company sales of inventory salesSalesDr.20000Purchases20000($35000-$15000)(4) Elimination of unrealised profit in closing inventoryClosing Inventory(income statement)Dr.500Inventory(balance sheet)500[1000- (2500-2000)]
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