60.1K

Verified Solution

Link Copied!

2 N (A) Calculate the purchased price paid by Bortit Ltd for A. Sellit. 7 Marks. (B) Explain what is meant by "purchase consideration". 1 Mark (C) Briefly explain the purpose of goodwill when an acquisition takes place. 2 Marks (Non-anonymous question o)* (10 Points) AGETING - 12 Borit tid purchased the business of A Set ole trader, on October 2011 settement of Financial Posted we $ $ Non-Current Assets Land and building 0 000 Plant and machinery 35.000 Motor vehicles 229 116.000 Current Inventory 7.000 Trade receables 4 000 Cash and che 5.000 16 000 Lest Currentibes 2.000 14.990 10.A Ordinary Sheets L29 The handbalencia the flow Land und buildings antend machinery Motor vehicles theory Trade Receivables Trade Pays 5 0 000 28.000 36.000 5.000 1000 2.000 Sortid not take over lets Bank count for the valued Goodall of A Sel520.000 ACCOUNTING -GRADE 12 Borit Ltd purchased the business of A. Sellit, a sole trader, on 1 October 2011. Sellie's Statement of Financial Position at that date was- S $ Non-Current Assets Land and buildings Plant and machinery Motor vehicles 50,000 35,000 21000 116,000 Current Assets Inventory Trade receivables Cash and cash equivalents 7,000 4,000 5.000 16,000 Less Current liabilities Trade Payables 2.000 14,000 130.000 Equity Ordinary Share Capital 130.000 The assets and liabilities were taken over at the following values: S Land and buildings Plant and machinery Motor vehicles Inventory Trade Receivables Trade Payables 80,000 28,000 16,000 5,000 3,000 2,000 Barit Ltd did not take over Sellit's Bank account. Borit Ltd has valued Goodwill of A.Sellit at $20,000

Answer & Explanation Solved by verified expert

See Answer