Sigmund Ltd acquires all the issued capital of Freud Ltd for a cash payment of $1,900,000 on 30 June 2004.The financial statements of both entities on 30 June 2005 are: The fair value of the net tangible assets of Freud Ltd on 30 June 2004 was $1,332,000.The equity of Freud at that time was made up of share capital of $1,172,000 and retained earnings of $160,000.Goodwill had been determined to have been impaired by $56,800 during the period.During the period ended 30 June 2005 there were no intragroup transactions.Which of the following consolidated financial statements is correct?
E) None of the given answers.

Question

Sigmund Ltd acquires all the issued capital of Freud Ltd for a cash payment of $1,900,000 on 30 June 2004.The financial statements of both entities on 30 June 2005 are:  The fair value of the net tangible assets of Freud Ltd on 30 June 2004 was $1,332,000.The equity of Freud at that time was made up of share capital of $1,172,000 and retained earnings of $160,000.Goodwill had been determined to have been impaired by $56,800 during the period.During the period ended 30 June 2005 there were no intragroup transactions.Which of the following consolidated financial statements is correct?
E) None of the given answers.

Quizplus · Accepted Answer

The Answer of Sigmund Ltd acquires all the issued capital of Freud Ltd for a cash payment of $1,900,000 on 30 June 2004.The financial statements of both entities on 30 June 2005 are:  The fair value of the net tangible assets of Freud Ltd on 30 June 2004 was $1,332,000.The equity of Freud at that time was made up of share capital of $1,172,000 and retained earnings of $160,000.Goodwill had been determined to have been impaired by $56,800 during the period.During the period ended 30 June 2005 there were no intragroup transactions.Which of the following consolidated financial statements is correct?
E) None of the given answers.

Sigmund Ltd Acquires All the Issued Capital of Freud Ltd