Corporate Accounting and Reporting - doc

Added on - 28 May 2020

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Running Head: Corporate Accounting and ReportingCorporate Accounting andReporting
Corporate Accounting and Reporting2QUESTION 1Sam Ltd equityAmountShare capital150000Reserves10000retained earnings30000Dividend6000Goodwill5000Purchase consideration130000CarryingamountFairvaluePlant(Cost)9400096000Land8000095000Inventory2000026000At 1 July 2013Net fair value of Identifiableassets and liabilities off SamLtd=($15000+$10000+$30000) (equity)+$2000*(1-30%)(plant)+$15000*(1-30%)(land)+$6000*(1-30%)(inventory)+$6000*(1-30%)(data base)-$9000(1-30%)(damages payable)-$5000(Goodwill)Net Fair Value=199000Consideration Paid=$130000-$6000(Dividend receivable)=124000Capital reserve=75000Recorded goodwill=5000Transfer to capital Reserve=70000
Corporate Accounting and Reporting3A. Worksheet entries as at 30 June 20171.Business Combination valuation entriesDrCrAccumulated depreciationDr 26000PlantCr24000Deferred Tax liabilityCr600Business combination valuation ReserveCr1400Depreciation ExpenseDr200Retained Earnings (01/07/16)Dr600Accumulated DepreciationCr800(1/10 x $2000p.a for 4 years)Deferred Tax LiabilityDr240Income Tax ExpenseCr60Retained EarningsCr180Amortisation Expense- DatabaseDr 1500Retained earnings (01/07/16)Dr 3150Income Tax ExpenseCr450Transfer from BusinessCr4200Combination Valuation ReserveTransfer from Business combination ValuationReserveDr 7000Income Tax expenseDr 3000Damage ExpenseCr7500GainCr2500Actual impairment losses- GoodwillDr 7000Business Combination Valuation ReserveDr 2400GoodwillCr94002.Pre-Acquisition EntriesAt 01/07/2013Retained Earnings (01/07/2013)Dr 30000Share CapitalDr 150000ReserveDr 10000Business Combination Valuation ReserveCr66000Shares in Sam ltd124000Dividend payableDr 6000Dividend receivableCr6000
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