On 1st July, 2018 Murray Ltd acquired 70% of the share capital of Darling Ltd for $100,000,000. Equity of Darling Ltd at acquisition date was: Share Capital $ 60,000,000 General Reserve $ 20,000,000 Retained Earnings $ 10,000,000 All assets and liabilities of Darling Ltd were recorded at fair value on acquisition. Ignore Tax effects. Required: Complete the worksheet below using the partial goodwill method with the NCI measured at the proportionate share of the acquiree’s identifiable net assets. Elimination of Investment in Darling Ltd Darling Ltd (S) $,000 Murray Ltd (70% of Darling) (P) $,000 30% NCI $,000 Fair Value of consideration transferred Less: FV of identifiable assets acquired & liabilities assumed Share capital on acquisition date 60,000 General reserve-acquisition date 20,000 Retained earnings-acquisition date 10,000 Fair value adjustment Goodwill on acquisition Non-controlling interest Prepare the consolidation adjustments and eliminations entries and recognise the NCI in the pre-acquisition equity of Darling Ltd, using the partial goodwill method with the NCI measured at the proportionate share of the acquiree’s identifiable net assets.
Question
On 1st July, 2018 Murray Ltd acquired 70% of the share capital of Darling Ltd for $100,000,000.
Equity of Darling Ltd at acquisition date was:
Share Capital $ 60,000,000
General Reserve $ 20,000,000
All assets and liabilities of Darling Ltd were recorded at fair value on acquisition. Ignore Tax effects.
Required:
- Complete the worksheet below using the partial
goodwill method with the NCI measured at the proportionate share of the acquiree’s identifiable net assets.
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Elimination of Investment in Darling Ltd |
Darling Ltd (S) $,000 |
Murray Ltd (70% of Darling) (P) $,000 |
30% NCI $,000 |
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Fair Value of consideration transferred |
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Less: FV of identifiable assets acquired & liabilities assumed |
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Share capital on acquisition date |
60,000 |
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General reserve-acquisition date |
20,000 |
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Retained earnings-acquisition date |
10,000 |
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Fair value adjustment |
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Goodwill on acquisition |
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Non-controlling interest |
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- Prepare the consolidation adjustments and eliminations entries and recognise the NCI in the pre-acquisition equity of Darling Ltd, using the partial goodwill method with the NCI measured at the proportionate share of the acquiree’s identifiable net assets.
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