澳洲English ACCOUNTING ASSIGNMENT
论文题目：ACCOUNTING
论文语言：English
论文专业：ACCOUNTING
字数：2000
学校国家：Australia
是否有数据处理要求：否
您的学校：大二
论文用于：BA assignment 本科课程作业
截止日期：2010-5-20
ACCOUNTING (FINANCIAL) 260
MAJOR ASSIGNMENT
SEMESTER 1 2010
DUE IN TUTORIAL WEEK
BEGINNING 24 MAY 2010
QUESTION 1- BUSINESS COMBINATION (25 MARKS)
Red Ltd is seeking to expand its share of the cosmetics market and has negotiated to acquire the operations of Lip Ltd.
At 1 July 2009, the trial balances of the two companies were as follows:
Red Ltd LipLtd
Cash $145 000 $ 5 200
Accounts receivable 34 000 21 300
Inventory 53 000 30 000
Shares in listed companies 16 000 22 000
Land and building (net) 70 000 40 000
Plant and equipment (net) 130 000 105 000
Goodwill (net) 6 000 5 000
Accounts payable $456 000
$65 000 $228 500
$ 40 000
Debentures 50 000 0
Mortgage loan 100 000 30 000
Contributed equity:
Ordinary shares of $1, fully paid 200 000 150 000
Other reserves 15 000 6 500
Retained earnings (30/6/09) 27 000 2 000
$457 000 $228 500
Red Ltd is to acquire all assets (except cash and shares in listed companies) of Lip Ltd. Acquisition-related costs are expected to be $7,600. The net assets of Lip Ltd are recorded at fair value except for the following:
Carrying amount Fair Value
Inventory $ 30 000 $ 26 000
Land and buildings 40 000 80 000
Shares in listed companies 22 000 18 000
Accounts payable (40 000) (49 100)
Accrued leave 0 (29 700)
In exchange, the shareholders of Lip Ltd are to receive, for every three Lip Ltd shares held, one Red Ltd share worth $2.50 each. Costs to issue these shares are $950. Additionally, Red Ltd will transfer to Lip Ltd its ‘Shares in Listed Companies’ asset, which has fair value of $15,000. These shares, together with those already owned by Lip Ltd, are sold and the proceeds distributed to the Lip Ltd shareholders. Assume that the shares were sold for their fair values.
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