| Tuna Limited | |||||||
| Acquisition Anlaysis | |||||||
| Cost of Acquisition | |||||||
| Cash | $ 30,000 | ||||||
| Shares | $ 60,000 | $ 90,000 | |||||
| Book Value of Net Assets | |||||||
| Share Capital | $ 66,000 | ||||||
| Retained Earnings | $ 6,000 | ||||||
| Total Book Value of Net Assets | $ 72,000 | ||||||
| Add: | |||||||
| Fair Value Adjustments | |||||||
| Increase in Plant after tax | $ 2,100 | ||||||
| Incraese in Patents after tax | $ 10,500 | ||||||
| Incraese in Inventory after tax | $ 3,150 | $ 15,750 | |||||
| Fair Value of Net Assets | $ 87,750 | ||||||
| Goodwill (100% Acquisition) | $ 2,250 | ||||||
| General Journal | |||||||
| Date | Partiuculars | Debit Amount | Credit Amount | ||||
| PRE ACQUISITION | |||||||
| 01-Jul-15 | Retained Earnings | $ 6,000 | |||||
| Share Capital | $ 66,000 | ||||||
| Business Combination Valuation Reserve | $ 18,000 | ||||||
| Shares in Tuna Ltd | $ 60,000 | ||||||
| Bank | $ 30,000 | ||||||
| AT THE TIME OF ACQUISITION | |||||||
| 01-Jul-15 | Inventory | $ 4,500 | |||||
| Deferred Tax Laibility | $ 1,350 | ||||||
| Business Combination Valuation Reserve | $ 3,150 | ||||||
| 01-Jul-15 | Depreciation – Accumulated | $ 30,000 | |||||
| To Plant | $ 30,000 | ||||||
| 01-Jul-15 | Plant | $ 3,000 | |||||
| Deferred Tax Laibility | $ 900 | ||||||
| Business Combination Valuation Reserve | $ 2,100 | ||||||
| 01-Jul-15 | Patent | $ 15,000 | |||||
| Deferred Tax Laibility | $ 4,500 | ||||||
| Business Combination Valuation Reserve | $ 10,500 | ||||||
| 01-Jul-15 | Goodwill | $ 2,250 | |||||
| Business Combination Valuation Reserve | $ 2,250 | ||||||
| AFTER ACQUISITION | |||||||
| 18-Aug-15 | Bank | $ 1,20,000 | |||||
| Patents | $ 90,000 | ||||||
| Gain on Sale | $ 30,000 | ||||||
| 18-Aug-15 | Gain on Sale | $ 15,000 | |||||
| Income Tax Expense | $ 4,500 | ||||||
| Business Combination Valuation Reserve – Transfer | $ 10,500 | ||||||
| 30-Jun-16 | Cost of Sales | $ 4,500 | |||||
| Income Tax Expense | $ 1,350 | ||||||
| Business Combination Valuation Reserve – Transfer | $ 3,150 | ||||||
| 30-Jun-16 | Depreciation (3000/ 5 years) | $ 600 | |||||
| Accumulated Depreciation | $ 600 | ||||||
| 30-Jun-16 | Deferred Tax Liability | $ 180 | |||||
| Income Tax Tax Expense | $ 180 | ||||||
| 30-Jun-17 | Depreciation | $ 600 | |||||
| Retained Earnings | $ 600 | ||||||
| Accumulated Depreciation | $ 1,200 | ||||||
| 30-Jun-17 | Deferred Tax Liability | $ 360 | |||||
| Income Tax Tax Expense | $ 180 | ||||||
| Retained Earnings | $ 180 | ||||||
| Consolidation Entries | |||||||
| 1 | Share Capital | $ 66,000 | |||||
| Share in Brim Limited | $ 66,000 | ||||||
| 2 | Goodwill | $ 2,250 | |||||
| Shares in Brim Ltd | $ 2,250 | ||||||
| TUNA LIMITED | |||||||
| Statement of financial position as at 30-06-2017 | |||||||
| Particulars | 30-06-2017 | ||||||
| Assets | |||||||
| Non-Current Assets | |||||||
| Property, Plant & Equipment | 82500 | ||||||
| Goodwill | 0 | ||||||
| Intangible Assets | 23100 | ||||||
| Long Term Investments | 24000 | ||||||
| 129600 | |||||||
| Current Assets | |||||||
| Deferred Tax Asset | 17550 | ||||||
| Inventories | 53100 | ||||||
| Trade Receivables | 20700 | ||||||
| 91350 | |||||||
| Total Assets | 220950 | ||||||
| Equity and Liabilities | |||||||
| Equity | |||||||
| Share Capital | 144210 | ||||||
| Retained Earnings | 13650 | ||||||
| Total Equity | 157860 | ||||||
| Non-current liabilities | |||||||
| Provisions | 0 | ||||||
| Total Non Current Liabilities | 0 | ||||||
| Current Liabilities | |||||||
| Other Liabilities | 37450 | ||||||
| Current tax payable | 25640 | ||||||
| Total current liabilities | 63090 | ||||||
| Total liabilities | 63090 | ||||||
| Total equity and liabilities | 220950 | ||||||
| Tuna | Brim | Journal | Adjustments | Journal | Group | ||
| Ltd | Ltd | number | |||||
| Dr | Cr | number | |||||
| Sales revenue | 64500 | 78000 | 142500 | ||||
| Cost of sales | 30900 | 46350 | 4500 | 72750 | |||
| Gross profit | 33600 | 31650 | -4500 | 0 | 69750 | ||
| Trading expenses | 4800 | 9000 | 13800 | ||||
| Office expenses | 7950 | 4050 | 12000 | ||||
| Depreciation | 1800 | 3900 | 1200 | 6900 | |||
| 14550 | 16950 | 1200 | 0 | ||||
| Profit from trading | 19050 | 14700 | -5700 | 0 | 28050 | ||
| Proceeds from sale of | 9000 | 15000 | 0 | 24000 | |||
| plant | |||||||
| Carrying amount of | 7500 | 14000 | 21500 | ||||
| plant sold | |||||||
| Gain/loss on sale of | 1500 | 1000 | 2500 | ||||
| machinery | |||||||
| Profit before tax | 20550 | 15700 | -5700 | 0 | 41950 | ||
| Tax expense | 11100 | 7300 | 180 | 0 | 18580 | ||
| Profit | 9450 | 8400 | 17850 | ||||
| Retained earnings | 48000 | 31500 | 180 | 17850 | |||
| (117/16) | |||||||
| Retained earnings | 57450 | 39900 | 180 | 17850 | |||
| (30/6/17) | |||||||
| Share capital | 96000 | 66000 | 66000 | 151040 | 247040 | ||
| BCVR | 0 | 18000 | 31650 | 13650 | |||
| Total equity | 53450 | 5900 | 84180 | 182690 | 157860 | ||
| Current liabilities | 21100 | 10500 | 0 | 5850 | 37450 | ||
| Deferred tax liability | 11000 | 15000 | 360 | 25640 | |||
| Total liabilities | 32100 | 25500 | 360 | 5850 | 63090 | ||
| Total equity and | 85550 | 31400 | 84540 | 188540 | 220950 | ||
| liabilities | 0 | ||||||
| Dr | Cr | ||||||
| Plant | 57000 | 107250 | 0 | 0 | 164250 | ||
| Accumulated depreciation | -18300 | -33450 | -30000 | -81750 | |||
| Intangibles | 12000 | 11100 | 23100 | ||||
| Shares in Brim Ltd | 90000 | 0 | 66000 | 24000 | |||
| Deferred tax asset | 8100 | 9450 | 17550 | ||||
| Inventory | 28500 | 24600 | 53100 | ||||
| Receivables | 8250 | 12450 | 20700 | ||||
| Goodwill | 0 | 0 | 0 | 0 | |||
| Total assets | 185550 | 131400 | -30000 | 66000 | 220950 |
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