|
Share capital |
$ 80,000 |
|
Retained earnings |
$ 29,600 |
|
General reserve |
$ 2,400 |
|
Consumer list |
$ 12,600 |
|
Plant |
$ 2,800 |
|
Inventory |
$ 2,100 |
|
Land |
$ 3,500 |
|
Net fair value of net assets |
$ 133,000 |
|
Less: |
|
|
Consideration |
$ 250,000 |
|
Fair value of NCI |
$ 28,000 |
|
Goodwill |
$ 145,000 |
|
Soda limited’s fair value |
$ 140,000 |
|
Net fair value of net assets |
$ 133,000 |
|
Soda limited’s goodwill |
$ 7,000 |
|
Goodwill |
$ 145,000 |
|
Soda limited’s goodwill |
$ 7,000 |
|
Pepsi -Control premium’s goodwill |
$ 138,000 |
Consolidation worksheet entries
BCVR entries
|
Plant Account |
Dr. |
$ 4,000 |
|
|
Deferred tax liability Account |
Cr. |
|
$ 1,200 |
|
BCVR Account |
Cr. |
|
$ 2,800 |
|
Depreciation expense Account |
Dr. |
$ 400 |
|
|
Retained earnings Account |
Dr. |
$ 800 |
|
|
Accumulated depreciation account |
Cr. |
|
$ 1,200 |
|
Deferred tax liability Account |
Dr. |
$ 360 |
|
|
Income tax expense Account |
Cr. |
|
$ 120 |
|
Retained earnings Account |
Cr. |
|
$ 240 |
|
Land Account |
Dr. |
$ 5,000 |
|
|
Deferred tax liability Account |
Cr. |
|
$ 1,500 |
|
BCVR Account |
Cr. |
|
$ 3,500 |
|
Consumer list Account |
Dr. |
$ 18,000 |
|
|
Deferred tax liability Account |
Cr. |
|
$ 5,400 |
|
BCVR Account |
Cr. |
|
$ 12,600 |
|
Goodwill Account |
Dr. |
$ 7,000 |
|
|
BCVR Account |
Cr. |
|
$ 7,000 |
|
at 1 July 2015 |
|
|
|
|
Retained earnings Account |
Dr. |
$ 23,680 |
|
|
Goodwill Account |
Dr. |
$ 138,000 |
|
|
BCVR Account |
Dr. |
$ 22,400 |
|
|
Share capital Account |
Dr. |
$ 64,000 |
|
|
General reserve Account |
Dr. |
$ 1,920 |
|
|
Investment in Soda Account |
Cr. |
|
$ 250,000 |
|
at 30 June 2018 |
|
|
|
|
Retained earnings Account |
Dr. |
$ 25,360 |
|
|
Goodwill Account |
Dr. |
$ 138,000 |
|
|
Share capital Account |
Dr. |
$ 64,000 |
|
|
BCVR Account |
Dr. |
$ 20,720 |
|
|
General reserve Account |
Dr. |
$ 1,920 |
|
|
Investment in Soda Account |
Cr. |
|
$ 250,000 |
NCI share of equity at acquisition date
|
Share capital Account |
Dr. |
$ 16,000 |
|
|
General reserve Account |
Dr. |
$ 480 |
|
|
Retained earnings Account |
Dr. |
$ 5,920 |
|
|
BCVR Account |
Dr. |
$ 5,600 |
|
|
NCI Account |
Cr. |
|
$ 28,000 |
Changes in equity’s NCI share
|
Retained earnings Account |
Dr. |
$ 1,280 |
|
|
BCVR Account |
Cr. |
|
$ 420 |
|
NCI Account |
Cr. |
|
$ 860 |
|
NCI share of profit Account |
Dr. |
$ 2,880 |
|
|
NCI Account |
|
|
$ 2,880 |
|
NCI Account |
Dr. |
$ 1,600 |
|
|
Dividend paid Account |
Cr. |
|
$ 1,600 |
|
NCI Account |
Dr. |
$ 800 |
|
|
Dividend declared Account |
Cr. |
|
$ 800 |
|
Movements in fair value [OCE] Account |
Dr. |
$ 320 |
|
|
NCI Account |
Cr. |
|
$ 320 |
Dividend paid and declared
|
Dividend revenue Account |
Dr. |
$ 6,400 |
|
|
Dividend paid Account |
Cr. |
|
$ 6,400 |
|
Dividend revenue Account |
Dr. |
$ 3,200 |
|
|
Dividend declared Account |
Cr. |
|
$ 3,200 |
|
Dividend payable Account |
Dr. |
$ 3,200 |
|
|
Dividend receivable Account |
Cr. |
|
$ 3,200 |
Unrealized profit in inventory
|
Retained earnings |
Dr. |
$ 1,400 |
|
|
Income tax expenses |
Dr. |
$ 600 |
|
|
Cost of sale |
Cr. |
|
$ 2,000 |
|
Sales |
Dr. |
$ 48,000 |
|
|
Cost of sale |
Cr. |
|
$ 44,000 |
|
Inventory |
Cr. |
|
$ 4,000 |
|
Deferred tax assets |
Dr. |
$ 1,200 |
|
|
Income tax expenses |
|
|
$ 1,200 |
NCI adjustment
|
NCI |
Dr. |
$ 560 |
|
|
NCI share of profit |
Cr. |
|
$ 560 |
Non-current asset transfer
|
Retained earnings |
Dr. |
$ 2,800 |
|
|
Deferred tax assets |
Dr. |
$ 1,200 |
|
|
Plant |
Cr. |
|
$ 4,000 |
|
NCI |
Dr. |
$ 560 |
|
|
Retained earnings |
Cr. |
|
$ 560 |
Depreciation on non-current asset transfer
|
Depreciation expense |
Dr. |
$ 400 |
|
|
Retained earnings |
Cr. |
|
$ 400 |
|
Income tax expenses |
Dr. |
$ 120 |
|
|
Deferred tax assets |
Cr. |
|
$ 120 |
|
|
|
|
|
|
Retained earnings |
Dr. |
$ 56 |
|
|
NCI |
Cr. |
|
$ 56 |
Intergroup service
|
Management and consulting fees |
Dr. |
$ 4,000 |
|
|
Administrative expenses |
Cr. |
|
$ 1,760 |
|
Manufacturing expense |
Cr. |
|
$ 2,240 |
Debentures
|
Debentures |
Dr. |
$ 80,000 |
|
|
Debentures in Soda Ltd |
Cr. |
|
$ 80,000 |
|
Debenture interest revenue |
Dr. |
$ 4,000 |
|
|
Financial expense |
Cr. |
|
$ 4,000 |
Interim Dividend paid
|
Dividend from Soda Ltd |
Dr. |
$ 6,400 |
|
|
Interim Dividend paid |
Cr. |
|
$ 6,400 |
|
|
|
|
|
|
Dividend payable |
Dr. |
$ 3,200 |
|
|
Dividend declared |
Cr. |
|
$ 3,200 |
Acquisition analysis
|
Share capital |
$ 560,000 |
|
Retained earnings |
$ 54,000 |
|
Plant and equipment’s fair value adjustment |
$ 14,000 |
|
Fair value of net assets |
$ 628,000 |
|
Assets acquired by Star Ltd (628000*35%) |
$ 219,800 |
|
Acquisition cost |
$ 300,000 |
|
Goodwill |
$ 80,200 |
|
Investment in A Ltd |
Dr. |
$ 300,000 |
|
|
Cash |
Cr. |
|
$ 300,000 |
|
(Recording of acquisition of shares of A Ltd) |
|
|
|
|
Equity in Investee Income |
Dr. |
$ 7,000 |
|
|
Investment in A Ltd |
Cr. |
|
$ 7,000 |
|
(Recording of amortization of plant and equipment) |
|
|
|
|
Investment in A Ltd |
Dr. |
$ 44,100 |
|
|
Equity in Investee Income |
Cr. |
|
$ 44,100 |
|
(Accrue 35% of the reported earnings) |
|
|
|
|
Dividend revenue |
Dr. |
$ 10,500 |
|
|
Investment in A Ltd |
Cr. |
|
$ 10,500 |
|
(Recording of cash dividend) |
|
|
|
|
Investment in A Ltd |
Dr. |
$ 9,800 |
|
|
Asset revaluation reserve |
Cr. |
|
$ 9,800 |
|
(Post-acquisition reserve) |
|
|
|
|
Equity in Investee Income |
Dr. |
$ 3,500 |
|
|
Investment in A Ltd |
Cr. |
|
$ 3,500 |
|
(Recognition of unrealized gross profit) |
|
|
|
Transaction 1
|
Date |
Particulars |
|
Amount |
Amount |
|
13-06-18 |
Foreign customer Receivable |
Dr. |
$ 99,713 |
|
|
|
Sales revenue |
Cr. |
|
$ 99,713 |
|
|
(Recording of sale transaction) |
|
|
|
|
30-06-18 |
Foreign exchange loss |
Dr. |
$ 2,625 |
|
|
|
Foreign customer Receivable |
Cr. |
|
$ 2,625 |
|
|
(Recording of Foreign exchange loss) |
|
|
|
|
10-07-18 |
Cash at bank |
Dr. |
$ 95,398 |
|
|
|
Foreign exchange loss |
Dr. |
$ 1,689 |
|
|
|
Foreign customer Receivable |
Cr. |
|
$ 97,087 |
|
|
(Settlement of sale transaction) |
|
|
|
|
Date |
Particulars |
|
Amount |
Amount |
|
15-06-18 |
Plant and equipment |
Dr. |
$106,841 |
|
|
|
Payable to foreign supplier |
Cr. |
|
$106,841 |
|
|
(Recording of purchase transaction) |
|
|
|
|
30-06-18 |
Payable to foreign supplier |
Dr. |
$ 6,661 |
|
|
|
Foreign exchange gain |
Cr. |
|
$ 6,661 |
|
|
(Recording of Foreign exchange gain) |
|
|
|
|
20-07-18 |
Payable to foreign supplier |
Dr. |
$100,180 |
|
|
|
Foreign exchange loss |
Dr. |
$ 10,309 |
|
|
|
Cash at bank |
Cr. |
|
$110,489 |
|
|
(Settlement of sale transaction) |
|
|
|
Deegan, C. (2012). Australian financial accounting. McGraw-Hill Education Australia.
Harris, T. S., & Rajgopal, S. (2018). Foreign Currency: Accounting, Communication and Management of Risks. Columbia Business School.
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