question archive On 1 July 2023, Gordon Ltd acquired all the issued shares (cum div
On 1 July 2023, Gordon Ltd acquired all the issued shares (cum div
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| On 1 July 2023, Gordon Ltd acquired all the issued shares (cum div.) of Henry Ltd for $528000. | |||
| At that date, the financial statements of Henry Ltd showed the following information. | |||
| Share capital | 220000 | ||
| General reserve | 110000 | ||
| Retained earnings | 154000 | ||
| Dividend payable | 44000 | ||
| All the assets and liabilities of Gordon Ltd were recorded at amounts equal to their fair | |||
| values at the acquisition date. The dividend payable reported at 1 July 2023 by Henry Ltd | |||
| was paid on 15 August 2023. Henry Ltd paid a further dividend of $55000 on 2 February 2024 | |||
|
from post-acquisition profits. |
|||
Prepare the consolidation worksheet entries for Gordon Ltd's group at 1 July 2023.
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Answer:
| Date | General Journal | Debit | Credit |
| 1 July 2023 | Retained earnings (1/7/23) | 154,000 | |
| Share Capital | 220,000 | ||
| General Reserve | 110,000 | ||
| Shares in Henry Ltd | 484,000 | ||
| 1 July 2023 | Dividend payable | 44,000 | |
| Dividend receivable | 44,000 | ||
| Working | |||
| FVINA acquired | 484,000 | ||
| (220,000 + 110,000 + 154,000) | |||
| Consideration transferred | 484,000 | ||
| (528,000 - 44,0000) | |||
| Goodwill |
