Acquisition Analysis

Acquisition Analysis
At 1st June 2019
Net fair value of the identIfiable
assets and liabilities of Davis Limited	FAIR VALUE- CARRYING AMOUNT
Equity	$ 1,007,000.00
Retained earnings	$ 432,000.00
Asset Revaluation Surplus	$ 345,000.00
	$ 1,784,000.00
Inventories	$ 242,200.00	346000
Land	$ 483,000.00	690000
Vehicle	$ 564,200.00	806000

Net identifiable assets	$ 3,073,400.00
Consideration Transferred	$ 2,878,000.00
	$ 245,872.00
Goodwill	$ 50,472.00

Combination Entries

	Pre Acquistion Entries

1st July 2019	Retained earnings (1/7/19)	Dr.	$ 946,891.40
	Share Capital		Dr.	$ 916,370.00
	Asset Revaluation surplus	Dr.	$ 313,950.00
	Capital reserve		Dr.	$ 751,260.60
	To gain on bargain purchase			$ 50,472.00
	To shares in Davis Limited			$ 2,878,000.00
	(for consideration given to Davis limited)

30th June 2020	Transfer from valuation Reserve	Dr.	$ 608,540.00
	To retained earnings				$ 608,540.00
	for transferred from BCVR to BCVR

	Retained Earnings			$ 751,260.60
	To capital reserve				$ 751,260.60
	for amount transferred to capital reserve

Entry of NCI	Retained earnings (1/7/19)	Dr.	$ 93,648.60
	Share Capital		Dr.	$ 90,630.00
	Asset Revaluation surplus		$ 31,050.00
	To shares in Davis Limited			$ 215,328.60
	for entry for non controlling assets entry passed

Entry of NCI	Retained earnings (1/7/19)	Dr.	$ 93,648.60
	Share Capital		Dr.	$ 90,630.00
	Asset Revaluation surplus		$ 31,050.00
	To shares in Davis Limited			$ 215,328.60
	for entry for non controlling assets entry passed

Date	Particluars			Debit	Credit
30th June 2020	Accumulated depreciation	Dr.	$ 201,000.00
	To vehicle				$ 39,800.00
	To deferred tax liability				$ 60,300.00
	To business combination valuation reserve			$ 100,900.00
	(for depreciation charged and adjusted against BCVR)

30th June 2020	Depreciation Expense		Dr.	$ 161,200.00
	To accumulated Depreciation			$ 161,200.00
	(for depreciation transferred to accumulated depreciation)

30th June 2020	Land		Dr.	$ 483,000.00
30th June 2020	To deferred tax liabilities	Dr.		$ 144,900.00
	To BCVR				$ 338,100.00
	(For adjustments made)

30th June 2020	Inventories A/c		Dr.	$ 242,200.00
	To deferred tax liabilities			$ 72,660.00
	To BCVR				$ 169,540.00
	(For adjustments made)

30th June 2020	Profit and loss A/c		Dr.	$ 382,760.00
	To depreciation on plant				$ 161,200.00
	To depreciation on fittings			$ 4,000.00
	to deferred tax liability				$ 217,560.00
	for recording the expenses in profit and loss account

30th June 2020	Capital A/c		Dr.	58000
	To profit and loss a/c				58000
	for recording the net profit