Radio Ltd acquired all the issued capital of Wave Ltd on 1 July 2004 for cash consideration of $2 million. The fair value of the net assets of Wave Ltd at that date was $1.8 million as follows:

During the period ending 30 June 2005 Wave Ltd declare a dividend of $300,000 that is identified as being paid out of pre-acquisition profits. Goodwill had been determined to have impaired by $20,000 during the period. What consolidation journal entries would be required to prepare group accounts for the period ended 30 June 2005?
E) None of the given answers.

Question

Radio Ltd acquired all the issued capital of Wave Ltd on 1 July 2004 for cash consideration of $2 million. The fair value of the net assets of Wave Ltd at that date was $1.8 million as follows:

During the period ending 30 June 2005 Wave Ltd declare a dividend of $300,000 that is identified as being paid out of pre-acquisition profits. Goodwill had been determined to have impaired by $20,000 during the period. What consolidation journal entries would be required to prepare group accounts for the period ended 30 June 2005?
E) None of the given answers.

Quizplus · Accepted Answer

The Answer of Radio Ltd acquired all the issued capital of Wave Ltd on 1 July 2004 for cash consideration of $2 million. The fair value of the net assets of Wave Ltd at that date was $1.8 million as follows:

During the period ending 30 June 2005 Wave Ltd declare a dividend of $300,000 that is identified as being paid out of pre-acquisition profits. Goodwill had been determined to have impaired by $20,000 during the period. What consolidation journal entries would be required to prepare group accounts for the period ended 30 June 2005?
E) None of the given answers.

Radio Ltd Acquired All the Issued Capital of Wave Ltd