If Apenhuizen sells its entire investment in Bergweide on January 1, 2021, for € 300,000 cash, what is the impact on Apenhuizen’s income?
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Apenhuizen acquires 20 percent of the outstanding voting shares of Bergweide on January 1, 2019, for € 210,000 and applies the equity method in accounting for this investment. Bergweide has a book value of € 900,000 at January 1, 2019, and records net income of € 210,000 during 2019 and € 230,000 in 2020. Bergweide declared and paid dividends of € 100,000 in each of these years.
On the acquisition date the book values of Bergweide’s asset and liability accounts are considered as equal to fair values except for a copyright whose value accounted for Apenhuizen’s excess cost in the acquisition. The copyright had a remaining life of 15 years at January 1, 2019.
If Apenhuizen sells its entire investment in Bergweide on January 1, 2021, for € 300,000 cash, what is the impact on Apenhuizen’s income?
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- Trump Ltd acquired all the assets and liabilities of Bush Ltd on 30 June 2020. The purchase consideration was as follows: $1,000,000 in cash paid on acquisition date Two shares in Trump Ltd for every one share in Bush Ltd. Bush Ltd has 2,000,000 shares on issue at 30 June 2020. At 30 June 2013 Trump Ltd shares were quoted on the ASX at $2.50 per share. A deferred payment of $500,000 to be paid on 30 June 2014.Trump Ltd’s cost of capital is 7% which represents a one period present value factor of 0.9346 Should the price of Trump Ltd shares fall below $2.50 in the six months following the acquisition Trump Ltd is required to pay a cash contingent consideration. It is estimated that there is a 60% probability that the share price will fall to $2.45 in this period. Other information Trump Ltd incurred legal and other costs associated with the acquisition of $10,000 Trump Ltd incurred share issue costs of $4,000 The assets and liabilities acquired from Bush Ltd are as follows:…On 1 July 2019, Brad Ltd acquired all assets and liabilities of Pitt Ltd. In exchange for these assets and liabilities, Brad Ltd issued 100,000 shares that at date of issue had a fair value of $5.20 per share. Costs of issuing these shares amounted to $1,000. Legal cost associated with the acquisition of Pitt Ltd amounted to $1,200.The assets and liabilities of Pitt Ltd at 1 July 2019 were as follows:Carrying Amount ($) Fair Value ($)AssetsCash 2,000 2,000Accounts receivable 10,000 10,000Inventory 64,000 68,000Equipment 320,000 232,000Accumulated depn - Equipment (96,000) -Patents 280,000 280,000LiabilitiesAccounts payable (16,000) (16,000)Debentures (64,000) (64,000)Required:a) Prepare the acquisition analysis at 1 July 2019 for the acquisition of Pitt Ltd by Brad Ltd.b) Prepare the journal entries in the records of Brad Ltd at 1 July 2019.Trump Ltd acquired all the assets and liabilities of Bush Ltd on 30 June 2020. The purchase consideration was as follows: • $1,000,000 in cash paid on acquisition date • Two shares in Trump Ltd for every one share in Bush Ltd. Bush Ltd has 2,000,000 shares on issue at 30 June 2020. At 30 June 2013 Trump Ltd shares were quoted on the ASX at $2.50 per share. • A deferred payment of $500,000 to be paid on 30 June 2014.Trump Ltd’s cost of capital is 7% which represents a one period present value factor of 0.9346 • Should the price of Trump Ltd shares fall below $2.50 in the six months following the acquisition Trump Ltd is required to pay a cash contingent consideration. It is estimated that there is a 60% probability that the share price will fall to $2.45 in this period. Other information - Trump Ltd incurred legal and other costs associated with the acquisition of $10,000 - Trump Ltd incurred share issue costs of $4,000 The assets and liabilities acquired from Bush Ltd are as…
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