Jasper Ltd acquires all the issued capital of Carrot Ltd for a cash payment of $2 800 000 on 30 June 2014.The statement of financial position of both entities at purchase date is: Assuming the assets of Carrot Ltd are recorded at fair value,what is the consolidated statement of financial position at the date of purchase?

Question

Jasper Ltd acquires all the issued capital of Carrot Ltd for a cash payment of $2 800 000 on 30 June 2014.The statement of financial position of both entities at purchase date is:  Assuming the assets of Carrot Ltd are recorded at fair value,what is the consolidated statement of financial position at the date of purchase?

Quizplus · Accepted Answer

To prepare the consolidated statement of financial position, we need to add together the assets, liabilities and equity of both companies. 
For Carrot Ltd, since the assets are recorded at fair value, we will use those values. 
The consolidated statement of financial position will look like the statement of financial position of Jasper Ltd with the addition of Carrot Ltd's assets, liabilities and equity. 
Therefore, the correct option is B.

Jasper Ltd Acquires All the Issued Capital of Carrot Ltd