4. Required in each case a, b, c: Prepare the statements of financial position of...
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4. Required in each case a, b, c: Prepare the statements of financial position of Mother Ltd and the consolidated statement of financial position as at 1 January 2020 after each transaction, using for each question the statements of financial position of Mother Ltd and Son Ltd as at 1 January 2020 which were as follows: Items Mother Ltd Son Ltd (S) (S) Cash 30,000 10,000 Other net assets 25,000 2,800 12.800 3,000 Total assets 55,000 Ordinary shares of $1 cach 45,500 Retained earnings 9.500 Total equity 55,000 19,800 12.800 a. On 1 January 2020 Mother Ltd acquired all the ordinary share in Son Ltd for $15,000 cash. The fair value of the net assets in Son Ltd was their book value. b. Assume the purchase in case a was satisfied by the issue of 5,000 new ordinary shares in Mother Ltd. The fair value of a $1 ordinary share in Mother Ltd was $3. The fair value of the net assets in Son Ltd was their book value
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