Acc 260 Assignment
Accounting 260
Major assignment
Kowloon Tong ltd- Jordan ltd 1. Acquisition analysis at 1 July 2008
Net fair value of identifiable assets and liabilities of Jordan ltd = 60000 +30000 +21000+6000 +6000(1-30%) Inventory +1000(1-30%) Machinery +6000(1-30%) Land +8000(1-30%) Equipment =131700
Consideration transferred = 137200
Goodwill =137200- 131700 =5500
2. BCVR entries at 30 June 2010
1) Machinery Depreciation expense-machine Dr 100 Carrying amount Dr 700 Retained earnings Dr 140 Transfer from BCVR Cr 700 ITE Cr 240 2) Equipment Accumulate dep’n Dr 6000 Equipment Dr 2000 DTL Cr 2400 BCVR Cr 5600
Dep’n expense- equipment Dr 1000 Retained earnings Dr 1000 Accumulate dep’n Cr 2000
DTL Dr 600 Income tax expense Cr 300 Retained earnings Cr 300 3) Goodwill Dr 5500 BCVR Cr 5500
4) Impairment loss Dr 2750 Accumulated impairment loss Cr 2750
Major assignment
Kowloon Tong ltd- Jordan ltd 1. Acquisition analysis at 1 July 2008
Net fair value of identifiable assets and liabilities of Jordan ltd = 60000 +30000 +21000+6000 +6000(1-30%) Inventory +1000(1-30%) Machinery +6000(1-30%) Land +8000(1-30%) Equipment =131700
Consideration transferred = 137200
Goodwill =137200- 131700 =5500
2. BCVR entries at 30 June 2010
1) Machinery Depreciation expense-machine Dr 100 Carrying amount Dr 700 Retained earnings Dr 140 Transfer from BCVR Cr 700 ITE Cr 240 2) Equipment Accumulate dep’n Dr 6000 Equipment Dr 2000 DTL Cr 2400 BCVR Cr 5600
Dep’n expense- equipment Dr 1000 Retained earnings Dr 1000 Accumulate dep’n Cr 2000
DTL Dr 600 Income tax expense Cr 300 Retained earnings Cr 300 3) Goodwill Dr 5500 BCVR Cr 5500
4) Impairment loss Dr 2750 Accumulated impairment loss Cr 2750