Pre acquisition entries Inventories Dr COGS 400 Dr RE 172019 Cr ITE 120 Dr

Pre acquisition entries inventories dr cogs 400 dr re

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3. Pre-acquisition entries
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Inventories Dr COGS 400 Dr RE (1.7.2019) Cr ITE 120 Dr Share Capital Cr Transfer from BCVR 280 Dr BCVR Dr Goodwill Machinery Dr General Reserve Dr Accumulated depreciation 17,500 Cr Investment in Doe Ltd Cr Machinery 17,500 Dr Machinery 11,500 Dr Transfer from BCVR Cr DTL 3,450 Cr BCVR Cr BCVR 8,050 Dr Transfer from BCVR Dr RE (1.7.2019) 2,300 Cr BCVR Dr Depreciation expense 2,300 Cr Acc. Dep 4,600 Dr BCVR Cr Transfer from BCVR Dr DTL 1,380 Cr ITE 690 Cr RE (1.7.2019) 690 Land Dr Gain on Sale 10,000 Cr ITE 3,000 Cr Transfer from BCVR 7,000 Contingent Liability Dr Transfer from BCVR 7,000 Dr ITE 3,000 Cr Gain 2,000 Cr Legal Expense 8,000
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35,520 54,000 8,330 19,150 3,000 120,000 280 280 7,000 7,000 7,000 7,000
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Jane Ltd Doe Ltd Sales Revenue 506,250 330,000 Cost of goods sold 312,500 143,000 Gross Profit 193,750 187,000 Other revenues 55,000 16,500 Gains 17,500 13,200 Depreciation expense 67,500 52,800 Finance costs 32,500 29,700 Other expenses 6,250 8,250 Profit before income tax 160,000 125,950 Income tax expense 70,000 4,620 Profit for the year 90,000 121,330 Retained earnings 1.7.2020 144,000 160,300 Transfer from BCVR - - Transfer to general reserve - - Dividend paid - 10,000 Dividend declared - 30,000 Retained Earnings 30.6.2021 234,000 241,630 Share Capital 360,000 54,000 BCVR - - General Reserve 10,000 3,000 Total Equity 604,000 298,630 Dividends payable - 30,000 Debentures 80,000 - Trade payables 135,625 138,970 Other current liabilities 268,750 115,500 Deferred Tax Liabilities 60,625 32,200 Provisions 225,000 76,000 Total Liabilities 770,000 392,670 Total Equity and Liabilities 1,374,000 691,300 Assets Cash at bank 385,875 248,270 Dividends receivable 30,000 - Debentures in Jane Ltd - 64,000 Trade receivables 72,500 59,650 Inventories 88,750 20,570 Investment in Doe Ltd 120,000 - Land 267,500 144,700 Plant and machinery 550,000 238,160 Accumulated depreciation - plant and machinery 150,000 89,000 Goodwill - - Deferred Tax Assets 9,375 4,950 Total Assets 1,374,000 691,300 CA FV Inventories 12,000 16,000 Machinery (cost $100 000) 82,500 94,000 Land 80,000 90,000
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Contingent Liability 10,000 1. Acquisition Analysis Consideration transferred 120,000 BVINA: Share Capital 54,000 Retained Earnings 36,000 BCVR: Inventories 2,800 Machinery 8,050 Land 7,000 Contingent Liability 7,000 Total FVINA 100,850 Goodwill 19,150
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DR CR Group 836,250 455,500 380,750 71,500 30,700 120,300 62,200 14,500 285,950 74,620 211,330 304,300 - - 10,000 30,000 475,630 414,000 - 13,000 902,630 30,000 80,000 274,595 384,250 92,825 301,000 1,162,670 2,065,300 634,145 30,000 64,000 132,150 109,320 120,000 412,200 788,160 239,000 - 14,325 2,065,300
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Consolidation Date: 30.6.2021 (3 years after acquisition) 2. BCVR 3. Pre-acquisition entries Machinery Dr Accumulated depreciation 17,500 Dr RE (1.7.2020) Cr Machinery 17,500 Dr Share Capital Dr BCVR Dr Machinery 11,500 Dr Goodwill Cr DTL 3,450 Dr General Reserve Cr BCVR 8,050 Cr Investment in Doe Ltd Dr RE (1.7.2020) 4,600 Dr Depreciation expense 2,300 Cr Acc. Dep 6,900 Dr DTL 2,070 Cr ITE 690 Cr RE (1.7.2020) 1,380
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4. Intragroup Transactions 35,800 a 54,000 8,050 19,150 3,000 120,000 b c d Land Dust Extraction Machine
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e f g
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Working Space: Subsidiary (Doe Ltd) Parent (Jane Ltd) Subsidiary Parent Sum - - - - - - Journal entries: Working space for Machinery depreciation calcs:
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d) Doe Ltd (group) Jane Ltd CA at time of sale Depreciation rate used Depreciation recognised Thus, every year we must perform this journal entry: Since this is 30 June 2021, 2 years after the initial intragroup transaction, our depreciation
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Group Adjustment needed - - - - - -
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e) Doe Ltd (group) Jane Ltd CA at time of sale Useful years lef Depn. recognised n journal entry will be:
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