Acquisition Analysis and Consolidation Worksheet for Desklib

This document includes Acquisition Analysis as on 1 July, 2017, Pre-acquisition entries and Consolidation worksheet entries as at 30 June 2019, and Consolidation worksheet for the period ended 30 June, 2019. It also includes the subject, course code, course name, and college/university if mentioned.

Solution-1
Acquisition analysis as on 1 July, 2017
Particulars Amount ($)
Share Capital 13,000
General reserve 5,000
Retained Earnings 4,050
Goodwill already recorded (500)
Fair Valuation:
- Plant 700
- Land 1,400
- Inventories 560
- Brands 840
- Liability (1,050)
Net fair value of assets acquired 24,000
Consideration paid 24,600
Goodwill acquired 600
Goodwill already recorded 500
Goodwill to be recorded 100

Solution-2
Pre-acquisition entries and Consolidation worksheet entries as at 30 June 2019
Sr. No. Particulars Debit ($) Credit ($)
Pre Acquisition entry as on 30 June 2019
1 Share Capital 13,000
General reserve 3,000
Retained Earnings (1/7/18) * 8,010
Goodwill 100
Business combination valuation reserve 490
To Shares in ‘Y’ limited 24,600
(To record acquisition of Y Ltd. as on 30 June, 2019)
* The Retained earnings includes the sale of inventory, sale of land &
transfer from general reserve, calculated as 4,050+1400+560+2000
2 Transfer from business combination valuation reserve 700
To Business combination valuation reserve 700
(To record impact of sale of plant in current year on BCVR)
3 Business combination valuation reserve 1,050
To Transfer from business combination valuation reserve 1,050
(To record impact of settlement of court case in current year on
BCVR)
4 Transfer from General reserve 1,500
To General reserve 1,500
(To record transfer from general reserve)
Consolidated worksheet entries
5 Depreciation expense 100
Gain/ loss on sale of plant 700
Retained earnings (1/7/18) 140
To Income tax expense 240
To Transfer from business combination valuation reserve 700
(To record sale of plant, its depreciation and tax impact)
6 Brands 1,200
To Deferred tax liability 360
To Business combination valuation reserve 840
(To record brands in the books)
7 Transfer from Business combination valuation reserve 1,050
Income tax expense 450
To Damages expense 1,500

(To record settlement of court case in the current year)

Solution-3
Consolidation worksheet for the period ended 30 June, 2019
Ref
Adjustment entries
Ref
‘X’
Limited
‘Y’
Limited Total Debit ($) Credit
($) Group
Revenues 13,000 6,400 19,400 19,400
Expenses (7,000) (4,200) (11,200) 5 100 1,500 7 (9,800)
Trading profit 6,000 2,200 8,200 9,600
Gains (losses) on sale of
non-current assets 3,000 800 3,800 5 700 3,100
Profit before tax 9,000 3,000 12,000 12,700
Income tax expense (2,000) (500) (2,500) 7 450 240 5 (2,710)
Profit for the period 7,000 2,500 9,500 9,990
Retained Earnings (1/7/18) 33,300 5,500 38,800 1,5 8,150 30,650
Transfer from business
combination valuation
reserve
2,7 1,750 1,750 3,5 -
Transfer from General
reserve 3,000 1,500 4,500 4 1,500 3,000
43,300 9,500 52,800 43,640
Dividend paid (2,000) - (2,000) (2,000)
Retained earnings (30/6/19) 41,300 9,500 50,800 41,640
Share capital 15,000 13,000 28,000 1 13,000 15,000
General reserve 1,000 2,000 3,000 1 3,000 1,500 4 1,500
Business combination
valuation reserve 1,2 1,540 1,540 2,6 -
Other component of Equity
- Opening balance 3,000 1,500 4,500 4,500
Increase / decrease (500) 300 (200) (200)
Other component of Equity
- Closing balance 2,500 1,800 4,300 4,300
Total Equity 59,800 26,300 86,100 62,440
Accounts payable 4,000 1,000 5,000 5,000
Deferred tax liability 1,800 1,000 2,800 360 6 3,160
Other non-current liabilities 24,800 23,000 47,800 47,800
Total liabilities 30,600 25,000 55,600 55,960
Total Equity and liabilities 90,400 51,300 141,700 118,400
Plant 43,000 38,800 81,800 81,800
Accumulated Depreciation-
Plant (18,200) (22,000) (40,200) (40,200)
Land 15,000 20,000 35,000 35,000

Brands 8,000 - 8,000 6 1,200 9,200
Shares in ‘Y’ limited 24,600 - 24,600 24,600 1 -
Financial Assets 11,000 10,500 21,500 21,500
Cash 1,000 500 1,500 1,500
Inventories 4,000 3,000 7,000 7,000
Goodwill 2,000 1,800 3,800 1 100 3,900
Accumulated Impairment
Losses - (1,300) (1,300) (1,300)
Total Assets 90,400 51,300 141,700 118,400