Mickey Ltd acquired a 70 per cent interest in Mouse Ltd on 1 July 2003 for a cash consideration of $1,700,000.At that date the shareholders' funds of Mouse Ltd were: The assets of Mouse Ltd were recorded at fair value at the time of the purchase.
On 1 July 2005 Mickey Ltd purchased a further 20 per cent of the issued capital of Mouse Ltd for a cash consideration of $530,000.At this date the fair value of the net assets of Mouse Ltd were represented by:
Impairment of goodwill was assessed at $9,000; of which $5,000 relates to the current period.There were no intragroup transactions.What are the consolidation entries to eliminate the investment in the subsidiary and account for goodwill for the period ended 30 June 2006?
E) None of the given answers.

Question

Mickey Ltd acquired a 70 per cent interest in Mouse Ltd on 1 July 2003 for a cash consideration of $1,700,000.At that date the shareholders' funds of Mouse Ltd were:  The assets of Mouse Ltd were recorded at fair value at the time of the purchase.
On 1 July 2005 Mickey Ltd purchased a further 20 per cent of the issued capital of Mouse Ltd for a cash consideration of $530,000.At this date the fair value of the net assets of Mouse Ltd were represented by:
 Impairment of goodwill was assessed at $9,000; of which $5,000 relates to the current period.There were no intragroup transactions.What are the consolidation entries to eliminate the investment in the subsidiary and account for goodwill for the period ended 30 June 2006?
E) None of the given answers.

Quizplus · Accepted Answer

The Answer of Mickey Ltd acquired a 70 per cent interest in Mouse Ltd on 1 July 2003 for a cash consideration of $1,700,000.At that date the shareholders' funds of Mouse Ltd were:  The assets of Mouse Ltd were recorded at fair value at the time of the purchase.
On 1 July 2005 Mickey Ltd purchased a further 20 per cent of the issued capital of Mouse Ltd for a cash consideration of $530,000.At this date the fair value of the net assets of Mouse Ltd were represented by:
 Impairment of goodwill was assessed at $9,000; of which $5,000 relates to the current period.There were no intragroup transactions.What are the consolidation entries to eliminate the investment in the subsidiary and account for goodwill for the period ended 30 June 2006?
E) None of the given answers.

Mickey Ltd Acquired a 70 Per Cent Interest in Mouse