00 135000 cash currenttaxliability 6000

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Unformatted text preview: s and liabilities acquired $179 000 Consideration transferred: Shares in Magnetic Ltd Shares issued by Mornington Ltd 60 000 Shares in Magnetic Ltd to issue: (3/4 x 60 000) 45 000 x $3.00 $135 000 Cash Current tax liability $6 000 Provision for leave 10 000 Debentures 50 000 5% premium 2 500 Liquidation costs 2 500 71 000 60 000 Less cash held 11 000 Total consideration $195 000 Goodwill [$195 000 ‐ $179 000] $16 000 6 Problem 12.3 (Cont’d) Acquisition Analysis: Magnetic Ltd – Moa Ltd’s Spare Parts Retail Division Net fair value of identifiable assets and liabilities acquired Land & buildings Plant & machinery Office equipment Inventory Accounts receivable Accounts payable Provision for leave Consideration transferred: Cash Shares [11 000 x $3.00] Land and Buildings Goodwill [$103 000 ‐ $78 000] C. $14 000 7 000 $30 000 34 500 2 500 12 000 20 000 99 000 $10 000 33 000 60 000 $103 000 $25 000 21 000 $78 000 MAGNETIC LTD General Journal Land & buildings Plant & machinery Office equipment Shares in listed companies Inventory Accounts receivable Goodwill Accounts payable Bank loan Cash Share capital (Acquisition of assets and liabilities of Mornington Ltd and issue of shares) Dr Dr Dr Dr Dr Dr Dr Cr Cr Cr Cr 60 000 50 000 4 000 15 000 54 000 26 000 16 000 14 000 16 000 60 000 135 000 Share capital Cash (Payment of costs of issuing shares) Dr Cr 2 000 2 000 Acquisition‐related expenses Cash (Costs related to acquisition) Dr Cr 2 500 2 500 7 Problem 12.3 (Cont’d) Land & buildings Plant & machinery Office equipment Inventory Accounts receivable Goodwill Accounts payable Provision for leave Cash Share capital Land & buildings (Acquisition of the spare parts retail division of Moa Ltd and issue of shares) Dr Dr Dr Dr Dr Dr Cr Cr Cr Cr Cr Acquisition‐related expenses Cash (Payment of acquisition‐related costs) Dr Cr 30 000 34 500 2 500 12 000 20 000 25 000 14 000 7 000 10 000 33 000 60 000 1 000 1 000 8...
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This homework help was uploaded on 04/04/2014 for the course ACCY 200 taught by Professor Kevin during the Three '12 term at University of Wollongong, Australia.

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