Test 2 Intragroup Transactions – Revision QuestionsOn 30th June 2012, Acquirer Ltd paid 720 000 money to get all of Acquiree Ltd’s issued shares. On a similar date, Acquiree Ltd has the accompanying data:
Offer capital 120 000 offers $540 000
Held income 18 000
General Reserve 54 000
Resource Revaluation surplus 54 000
At securing date, Acquiree’s recognizable net resources were recorded at reasonable incentive in the organization’s monetary position aside from land with a reasonable estimation of $540 000 and a conveying measure of $477 000. Acquiree Ltd has not revalued the land.
Acquiree Ltd sold inventories to Acquirer Ltd for $624 000 amid the year finished 30th June 2014. Amid that year, Acquiree Ltd obtained this stock at an expense of $480 000. On 30th June 2014, Acquirer Ltd has 20% of the inventories stayed in its end inventories. The intermittent framework is utilized by the Group to record its stock exchanges.
Acquirer Ltd owed Acquiree Ltd $42 000 for buy of inventories as at 30 June 2014.
Acquirer Ltd inventories as at 30th June 2013 included inventories purchased from Acquiree Ltd for $124 800. Acquiree Ltd initially paid $120 000 to purchase these inventories.
Disability misfortunes identified with altruism of Acquiree Ltd, which emerges on the obtaining, had not been perceived in the earlier year’s merged fiscal summaries. Amid the year finished 30th June 2014, altruism is weakened by $1 200.
Acquirer Ltd sold its current gear to Acquiree Ltd for $576 000 on 1 July 2012. Acquirer Ltd had initially paid $480 000 to purchase this hardware on 1 July 2008. The gear had a unique evaluated valuable existence of 10 years. Acquiree Ltd will deteriorate the gear over the rest of the long periods of its helpful life.
In May 2012, Acquirer Ltd got an advance of $360 000 from Acquiree Ltd. Acquirer Ltd paid Acquiree Ltd an enthusiasm of $30 000 on the advance amid the year finished 30th June 2014.
Acquiree Ltd got the board administrations from Acquirer Ltd for $12 000 amid the year finished 30th June 2014.
The organization salary impose rate is 30%.
Set up the obtaining investigation as at 30th June 2012.
Set up the solidified diary passages for the year finished 30th June 2014 for the Acquirer Ltd aggregate required for these intragroup exchanges and equalizations.
ACCT2002 Fair Value Adjustments: Revision
Pluto Ltd acquired 100% of the issue shares of Mickey Ltd for $350,000 paid in cash.
Date of acquisition: 1 July 2015. At this date Mickey Ltd reported the following shareholder’s equity:
Share capital 50,000
Retained earnings 37,000
Pluto group adopts the cost model. Carrying amounts and fair value of assets and liabilities of Mickey Ltd are as follows:
|Carrying amount ($)||Fair value ($)|
|Cash at bank||5,000||5,000|
|Less accumulated depreciation||(5,000)||0|
- All the inventory was sold on 1 April 2016
- At acquisition date the motor vehicle was 2 years old and it’s total useful life is 5 years.
- Mickey Ltd has agreed to pay a voluntary redundancy to 5 employees after the acquisition, should they wish to take it. The fair value is $20,000 for each employee. The employees were yet to make the decision as at 30 June 2016.
- Mickey Ltd developed a new product before acquisition date. The product is selling profitably under its current brand name. The fair value of the brand name was measured reliably at $300,000. The cost of this is currently expensed by Mickey Ltd.
- The annual impairment test assessed the recoverable amount of Mickey Ltd’s goodwill at $ 100,000 on 30 June 2016
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