corporate accounting and reporting

CORPORATE ACCOUNTING AND
REPORTING

Acquisition analysis
At 1 July 2016:
Net fair value of identifiable assets
and liabilities acquired = $120 000 + $25 000 + $55 000 (equity)
+$30 000 (1-30%) (Land)
+$7 600 (1-30%) (Inventories)
+$4 000 (1-30%) (Machinery)
+$6 000 (1-30%) (Vehicles)
= $247 600
Consideration transferred = $276 600
Goodwill = $29 000
Worksheet entries at 1 July 2016:
Business combination valuation entries:
Inventory Dr. 7 600
Deferred tax liability Cr. 2 280
Business combination valuation reserve Cr. 5 320
Accumulated depreciation – Machinery Dr. 52 000
Machinery Cr. 41 250
Deferred tax liability Cr. 1 200
Business combination valuation reserve Cr. 9 550
Accumulated depreciation – Vehicles Dr. 47 000
Vehicles Cr. 37 333
Deferred tax liability Cr. 1 800
Business combination valuation reserve Cr. 7 867
Goodwill Dr. 29 000
Business combination valuation reserve Cr. 29 000
Pre-acquisition entries:
Retained earnings (1/7/16) Dr. 55 000
Share capital Dr. 120 000
Business combination valuation reserve Dr. 51 737
Shares in Wallaby Ltd. Cr. 226 737
Worksheet entries at 30 June 2019:
Business combination valuation entries: