On 1 July 2005 Harry Ltd purchased 80 per cent of the issued share capital of Wills Ltd and has control of Wills. The fair value of the net assets of Wills Ltd on that date was represented as follows:

Harry Ltd paid cash consideration of $2,500,000 for Wills. Wills Ltd made an operating profit of $350,000, there were no intragroup transactions during the period ended 30 June 2006. Goodwill had been determined to have been impaired during the year by $25,000. What consolidation journal entries are required for the period and what is the minority interest in equity as at 30 June 2006?
E) None of the given answers.

Question

On 1 July 2005 Harry Ltd purchased 80 per cent of the issued share capital of Wills Ltd and has control of Wills. The fair value of the net assets of Wills Ltd on that date was represented as follows:

Harry Ltd paid cash consideration of $2,500,000 for Wills. Wills Ltd made an operating profit of $350,000, there were no intragroup transactions during the period ended 30 June 2006. Goodwill had been determined to have been impaired during the year by $25,000. What consolidation journal entries are required for the period and what is the minority interest in equity as at 30 June 2006?
E) None of the given answers.

Quizplus · Accepted Answer

The Answer of On 1 July 2005 Harry Ltd purchased 80 per cent of the issued share capital of Wills Ltd and has control of Wills. The fair value of the net assets of Wills Ltd on that date was represented as follows:

Harry Ltd paid cash consideration of $2,500,000 for Wills. Wills Ltd made an operating profit of $350,000, there were no intragroup transactions during the period ended 30 June 2006. Goodwill had been determined to have been impaired during the year by $25,000. What consolidation journal entries are required for the period and what is the minority interest in equity as at 30 June 2006?
E) None of the given answers.

On 1 July 2005 Harry Ltd Purchased 80 Per Cent