PKT Ltd acquired 80% of the ordinary shares of CF Ltd. The net assets were fairly valued on 1 January 2021 except for machinery that were undervalued by R550 000. The machine was purchased on 1 January 2020 for R1 250 000 and had a useful life of 5 years. No adjustments at acquisition for the above matter. Prepare the journal entries (with narrations) for the year ended 31 December 2022. Assume a tax rate of 30%
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. PKT Ltd acquired 80% of the ordinary shares of CF Ltd. The net assets were fairly valued on 1
January 2021 except for machinery that were undervalued by R550 000. The machine was purchased on 1
January 2020 for R1 250 000 and had a useful life of 5 years. No adjustments at acquisition for the above
matter. Prepare the
rate of 30%
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- 1. PKT Ltd acquired 80% of the ordinary shares of CF Ltd. The net assets were fairly valued on 1 January 2021 except for machinery that were undervalued by R550 000. The machine was purchased on 1 January 2020 for R1 250 000 and had a useful life of 5 years. No adjustments at acquisition for the above matter. Required: Prepare the journal entries (with narrations) for the year ended 31 December 2022. Assume a tax Rate of 30% 1.2. PKT Ltd wanted to achieve a 25% GP for each sale completed. Inventory sales between AB and CF Ltd amounted to R1875 000 for the year ended 31 December 2022. Inventory on hand in CF Ltd previously Purchased from PKT Ltd: R620 000 (31 December 2022) R750 000 (31 December 2021) Required: Prepare the journal entries (with narrations) for the year ended 31 December 2022. Assume a tax rate of 30%.Ryan Ltd holds a 75% interest in Tully Ltd. On 30 June 2021 Tully Ltd transferred a depreciable non-current asset to Ryan Ltd at a profit of $15 000. Ryan Ltd determined that the remaining useful life of the asset at the date of transfer to Ryan Ltd was 5 years and the tax rate is 30%. The impact of the above transaction on the NCI share of profit at 30 June 2021 is: a. a decrease of $2 625 b. an increase of $3 750 c. an increase of $2 100 d. a decrease of $3 225 e. None of the above Please dont provide answer in image format thannk youSydney Ltd purchased 20% of the shares in Melbourne Ltd on 1 July 2019 for $250,000. During the year Melbourne Ltd announced a netprofit of $60,000 and declared and paid dividends of $20,000.If Sydney Ltd accounted for the investment in Melbourne Ltd using the cost method how much revenue would Sydney Ltd have recogniseddue to its investment in Melbourne Ltd for the year ending 30 June 2020.
- Question oneAbani Limited acquired a machinery on 1/1/2020 for K200,000. The company depreciates the machinery at 25% per annum on cost. The company`s tax rate is 35% and that the year end is 31/12.The company is entitled to the following capital allowances:Year K2020 100,0002021 100 0002022 02023 0The company also had the following profits before tax but after depreciation as follows:Year K2020 125,0002021 140,0002022 175.0002023 192,000You are required to prepare the profit and Loss account extracts for all the yearsa) Ignore Deferred tax b) Include deferred tax c) Statement of Financial position (extracts) for the years 2020 to 2023On 1 July 2022, Dean Ltd acquired the remaining 80% of the issued shares of Lewis Ltd for shares in Dean Ltd with a fair value of $1 000 000. At that date, the financial statements of Lewis Ltd showed the following information. All the assets and liabilities of Lewis Ltd were recorded at amounts equal to their fair values at the acquisition date, except some equipment recorded at $50 000 below its fair value with a related accumulated depreciation of $80 000. Assume the equipment has not been revalued in the subsidiaries accounts. Also, Dean Ltd identified at acquisition date a contingent liability related to a lawsuit where Lewis Ltd was sued by a former supplier and attached a fair value of $40 000 to that liability. The previous held interest by Dean Ltd in Lewis Ltd (ie 20% of the issued shares) was recognised by in Dean Ltd.’s accounts at the fair value at acquisition date of $250 000. Dean Ltd incurred $15 000 in acquisition related costs including $10 000 in share issue costs.…On January 2, 2019, ABC Co. acquired 80% of the outstanding common stock of Shade Co. for ₱1,344,000 with no goodwill resulting from the acquisition. The following selected account balances were taken from the accounting records of XYZ Co. Details shown doe XYZ Co. in the image. The building has an estimated useful life of 10 years and the equipment is expected to last for 5 years. For the year 2019, ABC Co. reported net income from own operations of ₱2,240,000 and XYZ Co. reported ₱600,000 net income from own operations. ABC Co. accounts its investment in XYZ Co. using the cost method. What is the consolidated income statement for the year 2019. NCI in the consolidated FS for the year 2019.
- On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…On 1 July 2019, Brad Ltd acquired all of the assets and liabilities of Pitt Ltd. In exchange for these assets and liabilities, Brad Ltd issued 100 000 shares that at date of issue had a fair value of $5.20 per share. Costs of issuing these shares amounted to $1000. Legal costs associated with the acquisition of Pitt Ltd amounted to $1200. The asset and liabilities of Pitt Ltd at 1 July 2019 were as follows: Carrying amount Fair value Assets $ 2000 10000 64 000 320 000 $ 2000 10000 Cash Accounts receivable 68 000 232 000 Inventories Equipment Accumulated depreciation – equipment (96 000) 240 000 Patents 280 000 Liabilities (16 000) (64 000) Accounts payable (16000) (64 000) Debentures Required (a) Prepare the acquisition analysis at 1 July 2019 for the acquisition of Pitt Ltd by Brad Ltd.On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…
- On October 01,2019, the Tomoe Co. acquired 100% of the Nanami Co. when the fair value of Nanami's net assets as Php116M and their carrying amount was Php120M. The consideration transferred comprised Php200M in cash transferred at the acquisition date, plus another Php60M in cash to be transferred 11 months after the acquisition date if a specified profit target was met by Nanami. At the acquisition date, there was only a low probability of the profit target being met, so the fair value of the additional consideration liability was Php10M. In the event, the profit target was met and the Php60M cash was transferred. Provide the Journal Entries for the business combination until the measurement periodOn January 2, 2020, Kent Corp. paid 1,600,000 for the purchase of 40% of the ordinary shares of Kara Company. The statement of financial position of Kara at the date of acquisition shows the following information:Assets subject to depreciation (remaining useful life is 8 years) 2,400,000Assets not subject to depreciation 800,000Liabilties 400,000Both book value and fair value are the same for assets not subject to depreciation and liabilities. The fair market value of Karas assets subject to depreciation is 2,720,000. Kara depreciates its assets using the straight-line method. Karas intangibles are amortized over a 20-year period. Net income for the year ended December 31, 2020, is 640,000. It declares and pays dividends of 500,000 in 2020.What amount of the investment cost is attributable to goodwill? a. 480,000 b. 352,000 c. 608,000 d. 128,000C4) Helta Ltd acquired 100% of the share capital of Buzz Ltd on 1 January 2021. On that date, Helta Ltd began implementing a major change in the nature of Buzz Ltd’s trade. The trading profits/(losses) of each company for the two years ended 31 March 2021 are: Buzz Ltd Helta Ltd ££ Year ended 31 March 2020 80,000 20,000 Year ended 31 March 2021 100,00 20,000 The profits and losses are generated evenly throughout these periods. Neither company has any other income or gains, nor any other associated companies. Required: State, with supporting calculations, how relief is obtained for Buzz Ltd’s loss of £100,000, on the basis that the companies claim relief for losses as soon as possible.