Homework Answers
b) Net assets is difference total value of assets and liabilities . In other words it should be equal to equity plus retained earnings.
a)
Total net assets of Leo
=Retained earnings on date of acquisition+ total value of RM 1 Ordinary shares
=1,425,000+3,000,000
=4,425,000
Total net assets of Tiger
=Retained earnings on date of acquisition+ total value of RM 1 Ordinary shares
=950,000+2,000,000
=2,950,000
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