Accounting for subsidiary
$2000
- Dividend payable $0
$6000
Cost of Acquisition = $6500
Goodwill = $500
Ammortisation = $25* p.a
(ii) Acquisition Analysis: PDQ Ltd
At 30 April 20x9:
Fair Value of identifiable Net Assets (INA) = $6000
- Share capital $3000
- Reserves $1500
- Retained profits $1000
- Dividend payable $500
$6000
Cost of Acquisition = $6500
Goodwill = $500
Ammortisation = $25* p.a
* Assuming Goodwill was amortised for 20 years Straight Line in accordance with AASB 1013: Accounting For Goodwill.
Consolidation Adjustment (In Bach's Books)
(1) At 30 April 20X9
(i) Acquirement CPE Ltd
Retained profits DR $2000
Share capital DR $4000
Reserves DR $0
Dividend payable DR $0
Goodwill DR $500