13 acquisition analysis

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Unformatted text preview: are capital Cash (Payment of share issue costs) 3 Exercise 12.13 Acquisition Analysis Net fair value of identifiable assets and liabilities acquired: Accounts receivable Land Buildings Farm equipment Irrigation equipment Vehicles (172 000 – 48 000) Accounts payable Consideration transferred: $125 000 840 000 550 000 364 000 225 000 124 000 2 228 000 80 000 $2 148 000 Shares: Cash: 100 000 x $14 per share $480 000 +$5 500 +$150 000 ‐ $20 000 $1 400 000 615 500 Land: 220 000 Goodwill $2 235 500 ‐ $2 148 000 = $2 235 500 $87 500 4 Exercise 12.13 (Cont’d) The journal entries in Russell Ltd are: Two acceptable ways to record the acquisition journal entry: (1) Land Dr 140 000 Gain Cr 140 000 (Revalue land as part of consideration transferred in a business combination) Accounts receivable Dr 125 000 Land Dr 840 000 Buildings Dr 550 000 Farm equipment Dr 364 000 Irrigation equipment Dr 225 000 Vehicles Dr 124 000 Goodwill Dr 87 500 Accounts payable Cr 80 000 Share capital Cr 1 400 000 Cash Cr 615 500 Land Cr 220 000 (Acquisition of net assets...
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