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On 1 July 2015, Ava Ltd acquired all the issued capital of Tracy Ltd for a cash payment of $55000 when the equity of Tracy Ltd was:
Share Capital. $26000
Revaluation surplus $4000
At 1 July 2015, all assets of Tracy Ltd were fairly valued. Directors determined that
(a) Prepare an acquisition analysis and determine the amount of goodwill or gain on bargain purchase at acquisition. (Show all workings)
(b) Prepare the acquisition elimination
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- Pacman Ltd commenced business in 2015. For the year-ending 31/12/2016, they incur a loss of $2.2 million. It is not anticipated that there will be further losses as the company becomes more established in the market and will generate taxable profit in subsequent years. Profits before tax for subsequent years are: 2017: $560,000 2018: $890,000 2019: $970, 000 There are no temporary differences between carrying value of assets or liabilities. Tax rate is 30%. Prepare journal entries for 2017, 2018 and 2019On 1 July 2016 Spring Ltd acquired 40% of the shares of Summer Ltd for $63,200 cash. At this date all the identifiable assets and liabilities of Summer Ltd were recorded at amounts equal to fair value. The equity of Summer Ltd consisted of: $ Share Capital 125 000 Retained Earnings 33 000 At 1 July 2016, the identifiable assets and liabilities of Summer Ltd were recorded at fair value. Additional information: For the year ending 30 June 2017 Summer Ltd recorded an after-tax profit of $280 000 and paid a dividend of $60 000 from the profit earned in the year ending 30 June 2017. For the year ending 30 June 2018, Summer Ltd records an after-tax loss of $50 000. On 30 June 2018, Summer Ltd revalued an item of equipment upwards by $80 000 (assume a 30% tax rate). Required: Prepare journal entries in the book of Spring Ltd using equity method for financial years ending 2017 and 2018.The following intragroup transactions took place during the period ended 30 June 2022: Heart Ltd paid $25 000 during the period ended 30 June 2022 as management fees for services provided by Clear Ltd. During the period ended 30 June 2022, Heart Ltd declared a final dividend of $12 000 out of post-acquisition profits. Heart Ltd rented a spare warehouse to Clear Ltd starting from 31 December 2021 for 1 year. The total charge for the rental was $40 000, and Clear Ltd will pay this amount to Heart Ltd at 31 December 2022. Required In relation to the above intragroup transactions: 1. Prepare adjusting journal entries for the consolidation worksheet at 30 June 2022. 2. Explain in detail why you made each adjusting journal entry, whether there is a tax effect and if the NCI share of equity required adjustment.
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- Flat Wall Ltd has the following results for the year ended 31 December 2021 £ Trading profits 13,300 Property business income 4,600 Interest receivable 2,500 Qualifying charitable donations (1,000) The company also has the following brought forward losses: £ 20,400 Trading losses Flat Wall Ltd always utilises its tax losses in the most efficient way possible. Match the date by which Flat Wall Ltd must make a claim to offset its brought forward trading losses in the year ended 31 December 2021 and the amount of unrelieved trading losse which will be carried forward to the year ended 31 December 2022. Dates Date by which loss relief claim must be made Trading losses carried forward 31 December 2022 Date Amount carried forward 31 December 2023 Trading losses £0 £1,000The accountant for Indra Ltd (Indra) has determined the following information for the year ended 30 June 2020. Profit or loss P300,000 Share of total comprehensive income(after tax) of associates 20,000 Share of profit (after tax) of associates 15,000 Exchange difference gain (net of tax of P3,000) on translation of foreign operation up to the date sold (1 March 2020) 7,000 Exchange difference gain (net of tax of P9,000) on disposal of foreign operation recognized in profit for the year 21,000 Increase in asset revaluation surplus(net of tax) 45,000 What is the total amount of other comprehensive income for Indra for the year ended 30 June 2020?1. During the year ended 31/12/2013, A Ltd had estimated the corporation tax for the year to be £100,000. The amount was still outstanding as at 31/12/13. During the year ended 2014, on 30th June the actual amount payable was agreed with the tax authorities and eventually paid. Meanwhile during the year 2014 the company paid additional investment taxes of £80,000. As at the end of the year the company estimated that the payable for year 2014 will be £120,000. Required: Compare the income tax expense and the balance sheet liability for the year 2014 assuming that: The actual tax paid for the year 2013 was £90,000. The actual tax paid for the year 2013 was £110,000.
