Corporate Accounting

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Name of the Student:
Name of the University:
Author’s Note:

1CORPORATE ACCOUNTING
Table of Contents
Part A:........................................................................................................................................2
Sub part I:...............................................................................................................................2
Sub part II:..............................................................................................................................3
Sub part III:............................................................................................................................3
Part B:.........................................................................................................................................6
Introduction:...........................................................................................................................6
References and bibliography:.....................................................................................................9

2CORPORATE ACCOUNTING
Part A:
Sub part I:
Acquisition Analysis:
Total Share Capital 26,00,000
Percentage of shares acquired 100%
Value of shares acquired 26,00,000
Cost of Acquisition 6,20,000
Retained earnings at the date of acquisition 2,00,000
Add: Fair value adjustments 20,000
Total retained earnings at the date of acquisition 2,20,000
Value of Goodwill 4,00,000
Adjustments, elimination entry as on the date of Acquisition:
Particulars Debit Credit
1 Investment in shares of New World Retail 6,20,000
Cash/Bank 6,20,000
(Entry for acquisition of shares
2 Plant and Machinery 20,000
Retained earnings 20,000
(To record the fair value adjustment)
3 Net Assets 2,20,000
Goodwill 4,00,000
Investment in shares of New World Retail 6,20,000
(Elimination entry for consolidation)

3CORPORATE ACCOUNTING
Sub part II:
Adjustment or elimination journal entry as at 30 June 2018
Particulars Debit Credit
1 Plant and Machinery 20000
Retained earnings 20000
(To record the fair value adjustment)
2 Net Assets
22000
0
Goodwill
40000
0
Investment in shares of New World Retail
62000
0
(Elimination entry for consolidation)
3 Retained Earnings 4000
Inventory 4000
(To eliminate the unrealised profit on inter group
transaction)
4 Tax Liability 1200
Retained Earnings 1200
(To eliminate the effect of tax on unrealised profit)
Sub part III:
Adjustments elimination entry as at 30 June 2019
Particulars Debit Credit
1 Plant and Machinery 20000
Retained earnings 20000
(To record the fair value adjustment)
2 Net Assets
22000
0
Goodwill
40000
0
Investment in shares of New World Retail
62000
0
(Elimination entry for consolidation)
3 Retained Earnings 4000
Inventory 4000