The World Retailing Ltd acquires 80 per cent of the shares of Mark Construction Ltd on 30
June 2019 for a consideration of $584 000. The share capital and reserves of Mark
Construction Ltd at the date of acquisition are:
Share capital $200 000
Retained earnings $100 000
Revaluation surplus $150 000
There are no transactions between World Retailing Ltd and Mark Construction Ltd at the date
of acquisition. All assets of Mark Construction Ltd are fairly valued at the date of acquisition,
except for a major plant that had a fair value $25 000 greater than its carrying amount. The
cost of the plant was $125 000 and it had accumulated depreciation of $90 000.
In addition, the World Retailing Ltd acquired 100 per cent of the shares of Adelaide Retailing
Ltd on 1 July 2017-that is two years earlier. The cost of investment was $500 000. At that
date the capital and reserves of Adelaide Retailing Ltd were:
Share capital $255 000
Retained earnings $205 000
Can someone please help me with a journal entries for this question
ACCA Forums
FRgroup accounts
On this question we can see that world retailing Ltd is the parent company and has acquired mark construction a subsidiary company.
First we should calculate cost of control. But now I am finding it difficult as we don't have the price per share of the Parent company we need to determine the number of shares the Nci obtained from the parent multiply it by the market value of a share in order to calculate goodwill.
Correct me if I am wrong
The question is not correct
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