fbpx

Accounting Assignment | Custom Assignment Help

hi guys. was wandering if you could please give me a hand with this question. I’m just not sure what to do with the contingent liability (the court case) for the acquisition analysis.

Don't use plagiarized sources. Get Your Assignment on
Accounting Assignment | Custom Assignment Help
Just from $13/Page
Order Now

Custom Assignment Help

will the FVNIA be share cap + General Reserve+ RE+0.7*(Land FV-CA+Inventory FV-CA+Plant FV-CA)-dividend payable-Goodwill recorded- the FV of court case?

I am confused as indicates that liability isnt recognised in books, but it is identifiable so i would assume it should be subtracted from FVNIA.

As well as this, i am unsure of what the entry would be for when the FV of the court case is reduced

On 1 July 2016, Parent Ltd acquired all the shares of Son Ltd, on a cum-div. basis, for

$2,400,000. At this date, the equity of Son Ltd consisted of:

share capital- 500000 shares $1,000,000

General Reserve $500,000

Retained earnings $900,000

At the acquisition date, Son Ltd reported a dividend payable of $25,000 and its assets included $50,000 of recorded goodwill. The dividend payable at acquisition date was subsequently paid in August 2016.

Carrying amount Fair value

Land $500,000 $600,000

Inventory $20,000 $30,000

Plant (cost $300,000) $250,000 $300,000

The land on hand at acquisition date was sold in March 2018. Of the inventory on hand in Son Ltd at 1 July 2016, 70 percent was sold in November 2016 and the remainder was sold in July 2017. The plant was estimated to have a further 5-year life with zero residual value.

Son Ltd was involved in a court case that could potentially result in the company paying damages to customers. At the acquisition date, Parent Ltd calculated the fair value of this liability to be $10,000, even though Son Ltd had not recorded any provision for damages (liability). On 29 June 2018 Son Ltd reassessed the liability in relation to the court case as the chance of winning the case had improved. The fair value on 29 June 2018 was considered to be $4,000.

The company applies the partial goodwill method. The income tax rate is 30%.

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Homework Writing Services
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Military
good job
Customer 456821, September 1st, 2022
IT
Good job. Few edits made
Customer 463245, November 16th, 2022
Computer science
Didn't find until the last minute that I needed to pay extra money for an extra page, which caused my stuff to be turned in late...
Customer 452515, March 25th, 2020
Military
Good work.
Customer 456821, June 20th, 2022
English 101
I wish the writer would have picked a more natural topic. Although the work is good, it is obvious that the writer of the material is African American. The fact that I am not African American raises questions.
Customer 462899, April 26th, 2022
Statistics
Thank you for your neat and precise work, very professional
Customer 462485, May 22nd, 2022
Military
excellent work
Customer 456821, November 1st, 2022
Psychology
Thank you very much
Customer 452763, December 6th, 2021
Other
Excellent work.
Customer 459155, June 7th, 2022
Military
excellent work
Customer 456821, June 26th, 2022
Psychology
Good discussion.
Customer 462359, April 4th, 2022
English 101
i received the paper early
Customer 461063, November 1st, 2022
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat