80% Consolidation Question: Company S acquired 80% of Company R on December 31, 2021 for...
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Accounting
80% Consolidation
Question: Company S acquired 80% of Company R on December 31, 2021 for $3,000,000 cash.
On the date of acquisition, the fair market value of R's net identifiable assets were equal to their book values except for inventories (fair value $1,800,000), capital assets (net) (fair value $3,200,000) and liabilities (fair value $2,400,000).
Required:
Using the fair market value enterprise method of consolidation under IFRS:
1. Prepare all consolidation and elimination journal entries at December 31, 2021 and post these journal entries to the consolidation worksheet supplied to you.
2. Prepare a consolidated balance sheet in worksheet format as at December 31, 2021 using the consolidation worksheet provided to you. Add additional accounts which you believe are necessary.
3. What specific numerical differences would exist in the final consolidated balance sheet if the identifiable net asset method of consolidation was used in above circumstances?
See below for the worksheet provided:
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