ACQUISITION ANALYSIS, PARENT HOLDS PREVIOUSLY ACQUIRED
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ACQUISITION ANALYSIS, PARENT HOLDS PREVIOUSLY ACQUIRED SHARES IN SUBSIDIARY, WORKSHEET ENTRIES AT ACQUISITION DATE -.AV* At 1 July 2014, Pavo Ltd acquired 60% of the shares of Octans Ltd for 5153000 on a cum div. basis. Pavo Ltd had acquired 40% of the shares of Octans Ltd two years earlier for $80000. This investment, classified as a financial asset, was recorded at a fair value on 1 July 2014 of $102 000. The changes in fair value had all been taken to other comprehensive income. At 1 luly 2014, the equity of Octans Ltd consisted of:
Share capital $160000 Retained earnings 40000
At this date, the identifiable assets and liabilities of Ottans Ltd were recorded at fair value except for:
Carrying amount Inventory $ 40 000 Plant (cost $1200001 100000
Fair value $ 44 000 10$ 000
At 1 July 2014. Octans Ltd’s assets and liabilities included a dividend payable of $5000, and goodwill of $6000 (net of $4000 accumulated impairment losses). An analysis of the unrecorded intangibles of Octans Ltd revealed that the company had unrecorded internally generated brands, considered to have a fair value of 550000. Further, Octans Ltd had expensed research outlays of $80 000 that were considered to have a fair value of 520000. in its financial statements at 30 June 2014, Octans Ltd had reported a con-tingent liability relating to a potential claim by customers for unsatisfactot• products, the fair value of the claim being $10 000. The tax rate is 30%. Required Prepare the acquisition analysis at 1 July 2014, and the consolidation worksheet entries for preparation of consolidated financial statements of Pavo Ltd at that date.
WORKSHEET ENTRIES AT ACQUISITION DATE -.AV* At 1 July 2014, Pavo Ltd acquired 60% of the shares of Octans Ltd for 5153000 on a cum div. basis. Pavo Ltd had acquired 40% of the shares of Octans Ltd two years earlier for $80000. This investment, classified as a financial asset, was recorded at a fair value on 1 July 2014 of $102 000. The changes in fair value had all been taken to other comprehensive income. At 1 luly 2014, the equity of Octans Ltd consisted of:
Share capital $160000 Retained earnings 40000
At this date, the identifiable assets and liabilities of Ottans Ltd were recorded at fair value except for:
Carrying amount Inventory $ 40 000 Plant (cost $1200001 100000
Fair value $ 44 000 10$ 000
At 1 July 2014. Octans Ltd’s assets and liabilities included a dividend payable of $5000, and goodwill of $6000 (net of $4000 accumulated impairment losses). An analysis of the unrecorded intangibles of Octans Ltd revealed that the company had unrecorded internally generated brands, considered to have a fair value of 550000. Further, Octans Ltd had expensed research outlays of $80 000 that were considered to have a fair value of 520000. in its financial statements at 30 June 2014, Octans Ltd had reported a con-tingent liability relating to a potential claim by customers for unsatisfactot• products, the fair value of the claim being $10 000. The tax rate is 30%. Required Prepare the acquisition analysis at 1 July 2014, and the consolidation worksheet entries for preparation of consolidated financial statements of Pavo Ltd at that date.
ACQUISITION ANALYSIS, PARENT HOLDS PREVIOUSLY ACQUIRED SHARES IN SUBSIDIARY, WORKSHEET ENTRIES AT ACQUISITION DATE -.AV* At 1 July 2014, Pavo Ltd acquired 60% of the shares of Octans Ltd for 5153000 on a cum div. basis. Pavo Ltd had acquired 40% of the shares of Octans Ltd two years earlier for $80000. This investment, classified as a financial asset, was recorded at a fair value on 1 July 2014 of $102 000. The changes in fair value had all been taken to other comprehensive income. At 1 luly 2014, the equity of Octans Ltd consisted of:
Share capital $160000 Retained earnings 40000
At this date, the identifiable assets and liabilities of Ottans Ltd were recorded at fair value except for:
Carrying amount Inventory $ 40 000 Plant (cost $1200001 100000
Fair value $ 44 000 10$ 000
At 1 July 2014. Octans Ltd’s assets and liabilities included a dividend payable of $5000, and goodwill of $6000 (net of $4000 accumulated impairment losses). An analysis of the unrecorded intangibles of Octans Ltd revealed that the company had unrecorded internally generated brands, considered to have a fair value of 550000. Further, Octans Ltd had expensed research outlays of $80 000 that were considered to have a fair value of 520000. in its financial statements at 30 June 2014, Octans Ltd had reported a con-tingent liability relating to a potential claim by customers for unsatisfactot• products, the fair value of the claim being $10 000. The tax rate is 30%. Required Prepare the acquisition analysis at 1 July 2014, and the consolidation worksheet entries for preparation of consolidated financial statements of Pavo Ltd at that date.
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