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Corporate Accounting Assignment AASB101

   

Added on  2020-04-01

9 Pages1377 Words122 Views
Corporate accounting

TABLE OF CONTENTSQuestion 1..................................................................................................................................3Question 2..................................................................................................................................4Statement of financial position as per AASB 101.................................................................4Statement of changes in equity as per AASB 101.................................................................5

QUESTION 1Acquisition analysisFor passing worksheet entries for consolidation, it is essential to do acquisition analysis todetermine whether Consideration transferred is higher or net worth of company acquired ishigher. It is computed to determine whether net result of consolidation is goodwill or capitalreserve (Mills and Woodford, 2015). It situation where Consideration transferred is higherthan difference amount of asset received and consideration transferred is goodwill and if thenet worth of company acquired is higher than difference amount of asset received andconsideration transferred is a capital reserve. By considering given case facts of Ben Ltd andSam Ltd acquisition analysis for consolidation is as follows:Table 1: Acquisition analysis of Ben Ltd and Sam LtdEquity valueShare capital$100 000Reserves$5 000Retained earnings$10 000$115 000Revaluation of assetsPlant$2000(1-30%)$1 400Land $5000(1-30%)$3 500Inventory$4000(1-30%)$2 800Creditors$10000(1-30%)-$7 000Debtors$6000(1-30%)$4 200$4 900Net worth of Sam LtdEquity value+ Revaluation of assets$119 900Goodwill impairment-$5 000Net worth$114 900Consideration transferred ($123 500-6 000)$117 500Goodwill (As value of Consideration transferred is higher incomparison to Net worth of Sam Ltd)$2 600 Note: For acquisition analysis tax rate is assumed to be 30% by considering standard rate for the company as per Australian taxation provisions. Net fair value of identifiable assets and liabilitiesacquired$100 000 + $5 000 +$10 000 (equity)$115 000Revaluation of assets$2000(1-30%)+5000(1-30%)+4000(1-30%)$7 700Consideration transferred$123 500Goodwill$800Tax is assumed to be 30%

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