The questions to be answered are: Week 6 Question 1 (10 marks) Redcliff Ltd acquired the entire share capital of ABC Ltd for $18,000 cash on 31 December 20X4. The balance sheets of the two companies...

ASSIGNMENT
Name
ID
Lecturer Name
Course ID and Title
Date
Location
Week 6 Question 1
    
     
    Redcliff Ltd
    
    ABC Ltd
    
    
    $
    
    $
    Current assets
    
    240,000
    
    28,800
    Non-current assets:
    
    
    
    
    Investment in ABC at cost
    18,000
    
    
    
    Other asset
    96,000
    114,000
    
    9,600
    Total Assets
    
    354,000
    
    38,400
    Current Liabilities
    
    198000
    
    20,400
    Net Assets
    
    156,000
    
    18,000
    Paid-up Capital
    
    120,000
    
    12,000
    Retained Profits
    
    36,000
    
    6,000
    Owner's Equity
     
    156,000
     
    18,000
    Radcliff Ltd and its Subidiaries
    Consolidated Balance Sheet
    as at 31 December 20X4
     
    
     
     
    
     
    Current assets
    
    268,800
    Non-current assets:
    
     
    Investment in ABC at cost
    
    0
    Other asset
    
    105,600
    Total Assets
    
    374,400
    Current Liabilities
    
    218,400
    Net Assets
    
    156,000
    Paid-up Capital
    
    120,000
    Retained Profits
    
    36,000
    Owner's Equity
    
    156,000
     
     
     
Week 7 Question 2
     
    Book Value
    Fair Value
    Fair Value Less Book Value
    Investments
    26,000
    54,000
    28,000
    Accounts Receivable
    14,000
    8,000
    -6,000
    PPE
    26,000
    12,000
    -14,000
    Inventory
    70,000
    76,000
    6,000
    Franchise
    0
    10,000
    10,000
    Fair Value in Excess of Book Value
    44,000
    Fair Value in Deficit of Book Value
    20,000
    Net Fair Value Adjustment of Subsidiary
    24,000
    Book Value of Share Capital
    72,000
    Book Value of Retained Profits
    28,000
    Book Value of Net Assets
    100,000
    Add: Fair Value in Excess of Book Value
    44,000
    Less: Fair Value in Deficit of Book Value
    20,000
    Net Assets Value
    124,000
    Purchase Amount
    110,000
    Goodwill
    14,000
    Account
    Debit
    Credit
    Investment in Subsidiary
    110,000
     
    Goodwill
    14,000
     
    Share Capital of Subsidiary
    
    72,000
    Retained Profits of Subsidiary
    
    28,000
    Net Fair Value Adjustment of Subsidiary
     
    24,000
IAS 16 provides guidelines the accounting treatment for almost all property, plant and equipment (PPE). PPE should be measured at its cost initially and then subsequently should be recorded using either a cost or revaluation model. PPE is depreciated in such a way such that the amount that has depreciated is allocated along its useful life systematically.
Initial measurement
According to IAS 16.15, a PPE item should initially be recorded at cost, including all costs necessary to get the item to a state of intended use or working condition, encompassing site preparation costs, handling and delivery costs, installation charges and other professional fees.
Measurement subsequent to initial recognition
According to IAS 16, there are two accounting models:
· Cost model: According to IAS 16.30, the asset is measures as the difference between its cost and accumulated depreciation and impairment.
· Revaluation model. According to IAS 16.31, the asset is measured using a revaluation approach. The revalued amount is the difference between being its fair value as assesses on date of revaluation and any subsequent depreciation and impairment, assuming that it is possible to measure the fair value with a certain degree of reliability (Gyung 2009).
Week 8 Question 3
    Opening Value of Goodwill on 1 January 20X2
    60,000
    Goodwill Impairment in 20X2
    5,000
    Carrying Value of Goodwill on 31...