Exploring Financial Consolidation: Jonathan Ltd and Thomas Ltd
Step 1: Calculate Acquisition Analysis (1 July 2020)
Acquisition consideration: $246,000
Equity acquired: $130,000 (Share capital) + $50,000 (General reserve) + $40,500 (Retained earnings) = $220,500
Net identifiable assets and liabilities:
Plant (Fair value - Carrying amount): $10,000
Land (Fair value - Carrying amount): $20,000
Inventories (Fair value - Carrying amount): $8,000
Unrecorded assets/liabilities:
Brands: $12,000
Contingent liability: $15,000
Goodwill calculation:
Account for unrecorded items and calculate excess of fair value over consideration.