2) Decomat Ltd (D) acquires 75% of equity shares in Macs Ltd (M) through exchanging one...
2) Decomat Ltd (D) acquires 75% of equity shares in Macs Ltd (M) through exchanging one $1 share in D for three $1 shares in M. M has a total of 60 000 shares. D’s shares have a market value of $3 on the date of acquisition, while M’s shares are valued at $2. Determine the cost of the business combination. A) $15 000 B) $45 000 C) $60 000 D) $90 000
Homework Answers
The correct answer for this is B) $45000
See the below calculation
Decomat Acquired 75% of share in Macs 45000 shares
Decomate one share market price is $3
Macs one share market value is $2
Decomate exchanges 1 share for 3 Macs share (Decomate15000 share for 45000 share of Macs)
Decomate spent 15000 * 3 = 45000
But now the value off Macs 45000 share is 45000 * 2 = 90000
So 90000 - 45000 = 45000
Add Answer to:
2) Decomat Ltd (D) acquires 75% of equity shares in Macs Ltd (M)
through exchanging one...
On 1 July 2008 S Ltd acquires 25% of the issued capital to C Ltd for...
On 1 July 2008 S Ltd acquires 25% of the issued capital to C
Ltd for a cash consideration of $60 000. At the date of
acquisition, the shareholders’ equity of C Ltd is:
Additional Information:
(a) On the date of acquisition, buildings have a carrying
value in the accounts of C Ltd. of $40 000 and a market value of
$50 000. The buildings have an estimated useful life of 10 years
after 1 July 2008.
(b) For the...
Assume the Parent company acquires its subsidiary by exchanging 35,000 shares of its Common Stock, with...
Assume the Parent company acquires its subsidiary by exchanging 35,000 shares of its Common Stock, with a fair value on the acquisition date of $60 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsidiary’s assets and liabilities at an amount equaling their book values except for an unrecorded Patent owned by the subsidiary with a fair value of $200,000. Any further discrepancy between...
48. Assume that the parent company acquires its subsidiary by exchanging 84,000 shares of its $2...
48. Assume that the parent company acquires its subsidiary by exchanging 84,000 shares of its $2 par value Common Stock, with a fair value on the acquisition date of $38 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsidiary’s assets and liabilities at an amount equaling their book values except for an unrecorded Trademark with a fair value of $240,000, an unrecorded Video...
Venus Ltd made a takeover bid for all the issued voting shares of Mars Ltd offering...
Venus Ltd made a takeover bid for all the issued voting shares of Mars Ltd offering 3 Venus Ltd shares for every 2 Mars Ltd shares. The offer from Venus Ltd was accepted by 90% of the shareholders of Mars Ltd. At acquisition date, 1 January 20X7, the following information was available. Mars Ltd at 31 December 20X6 $’000 Share Capital (200 000 shares) 200 Capital Profits Reserve 300 Retained Profits 150 Total Equity 650 Market value of each company's...
Question 2 Parent Ltd acquired 60% of the equity in Sub Ltd on 1 April 2014...
Question 2 Parent Ltd acquired 60% of the equity in Sub Ltd on 1 April 2014 for $1 200 000. At that date, the equity of Sub Ltd comprised share capital of $600 000 and retained earnings of $340 000 Because Sub Ltd used the cost model for its recognised property, plant, and equipment, it had several items whose book value was lower than fair value at the date of acquisition. The book values and the fair values of these...
Question 6 Swamp Ltd acquired 90% of the shares (cum div.) of Tortoise Ltd on 1...
Question 6 Swamp Ltd acquired 90% of the shares (cum div.) of Tortoise Ltd on 1 July 2017 for $474 000. At this date, the equity of Tortoise Ltd consisted of: Share capital Asset revaluation surplus Retained earnings $ 250 000 60 000 160 000 At acquisition date all the identifiable assets and liabilities of Tortoise Ltd were recorded at amounts equal to fair value. Tortoise Ltd had recorded goodwill of $10 000 and a dividend payable of $20 000,...
Question 1: (18 marks) Supreme Ltd made a takeover bid for all the issued voting shares...
Question 1: (18 marks)
Supreme Ltd made a takeover bid for all the issued voting
shares of Mighty Ltd offering 2 Supreme Ltd shares for every 3
Mighty Ltd shares. The offer from Supreme Ltd was accepted by 70%
of the shareholders of Mighty Ltd.
At acquisition date, which was deemed to be 1 July 2013, the
following information is available:
Mighty Ltd at 30 June 2013
Share Capital (750 000 shares) Retained Profits
Capital Reserve
Total Equity
Market value...
Aº Read aloud Draw Highlight Erase Question 2 Week 8 (7 marks) The P Ltd acquires...
Aº Read aloud Draw Highlight Erase Question 2 Week 8 (7 marks) The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired $2,640,000 Fair value of liabilities acquired $720,000 Total shareholders' equity of the subsidiary company $800,000 Retained earnings of the subsidiary company $1,120,000 Required:...
1) On 1 July 2018 Pumba Ltd acquired 85% of the shares in Timon Ltd by...
1) On 1 July 2018 Pumba Ltd acquired 85% of the shares in Timon Ltd by issuing 520,000 shares. At the date of acquisition the share price of Pumba Ltd was $3.20 per share and the share price of Timon Ltd was $2.40 per share. The equity of Timon Ltd at 1 July 2011 consisted of the following: Share capital $902,000 Retained earnings $550,000 All identifiable net assets of Timon Ltd were recorded at fair value except for the carrying amount of...
Ethan Ltd acquired all the issued shares (ex div.) of Darren Ltd on l July 2017 for $110 000. At this date Darren Ltd...
Ethan Ltd acquired all the issued shares (ex div.) of Darren Ltd on l July 2017 for $110 000. At this date Darren Ltd recorded a dividend payable of $10 000 and equity of: Share capital Retained earnings Asset revaluation surplus $54000 36000 18000 All the identifiable assets and liabilities of Darren Ltd were recorded at amounts equal to their fair values at acquisition date except for: Carrying amount Fair value $14000 92500 $16000 Inventories Machinery (cost $100 000) 94000...
On 1 July 2008 S Ltd acquires 25% of the issued capital to C
Ltd for a cash consideration of $60 000. At the date of
acquisition, the shareholders’ equity of C Ltd is:
Additional Information:
(a) On the date of acquisition, buildings have a carrying
value in the accounts of C Ltd. of $40 000 and a market value of
$50 000. The buildings have an estimated useful life of 10 years
after 1 July 2008.
(b) For the...
Question 2 Parent Ltd acquired 60% of the equity in Sub Ltd on 1 April 2014 for $1 200 000. At that date, the equity of Sub Ltd comprised share capital of $600 000 and retained earnings of $340 000 Because Sub Ltd used the cost model for its recognised property, plant, and equipment, it had several items whose book value was lower than fair value at the date of acquisition. The book values and the fair values of these...
Question 6 Swamp Ltd acquired 90% of the shares (cum div.) of Tortoise Ltd on 1 July 2017 for $474 000. At this date, the equity of Tortoise Ltd consisted of: Share capital Asset revaluation surplus Retained earnings $ 250 000 60 000 160 000 At acquisition date all the identifiable assets and liabilities of Tortoise Ltd were recorded at amounts equal to fair value. Tortoise Ltd had recorded goodwill of $10 000 and a dividend payable of $20 000,...
Question 1: (18 marks)
Supreme Ltd made a takeover bid for all the issued voting
shares of Mighty Ltd offering 2 Supreme Ltd shares for every 3
Mighty Ltd shares. The offer from Supreme Ltd was accepted by 70%
of the shareholders of Mighty Ltd.
At acquisition date, which was deemed to be 1 July 2013, the
following information is available:
Mighty Ltd at 30 June 2013
Share Capital (750 000 shares) Retained Profits
Capital Reserve
Total Equity
Market value...
Aº Read aloud Draw Highlight Erase Question 2 Week 8 (7 marks) The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired $2,640,000 Fair value of liabilities acquired $720,000 Total shareholders' equity of the subsidiary company $800,000 Retained earnings of the subsidiary company $1,120,000 Required:...
Ethan Ltd acquired all the issued shares (ex div.) of Darren Ltd on l July 2017 for $110 000. At this date Darren Ltd recorded a dividend payable of $10 000 and equity of: Share capital Retained earnings Asset revaluation surplus $54000 36000 18000 All the identifiable assets and liabilities of Darren Ltd were recorded at amounts equal to their fair values at acquisition date except for: Carrying amount Fair value $14000 92500 $16000 Inventories Machinery (cost $100 000) 94000...
Most questions answered within 3 hours.
-
What is responsible for Jupiter's enormous magnetic field?
asked 4 minutes ago -
At the end of the year, a company offered to buy 5,000 units of
a product...
asked 5 minutes ago -
Implement C++ program for each of the following.
Let D = [-48, -14, -8, 0, 1,...
asked 25 minutes ago -
Consider a labor market in which LD = 400 – 4W and LS = 250 +...
asked 39 minutes ago -
Let’s say you are teaching a typically-developing young child
how to eat with a spoon. Describe...
asked 23 minutes ago -
Ask Your Teacher A toy gun uses a spring to project a 5.6-g soft
rubber sphere...
asked 35 minutes ago -
*****DO NOT ANSWER THIS QUESTION IF YOU DON'T
KNOW*******
Question - PERSONAL DEVELOPMENT ESSAY and Detailed...
asked 42 minutes ago -
A certain rifle bullet has a mass of 5.25 g. Calculate the de
Broglie wavelength of...
asked 1 hour ago -
Research new software products that assist in project
communication management. Write a paper summarizing your findings,...
asked 1 hour ago -
the figure below to the left shows a beaker completely filled
with water. then a block...
asked 1 hour ago -
what is the duistribution channels of HUL in india and how they
distribute?
how is this...
asked 1 hour ago -
Batteries play an important role in our everyday lives. From
making many devices mobile, to allowing...
asked 1 hour ago