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+--- Thread: Ask for help about Asset Revaluation Reserve (/showthread.php?tid=8899)
Ask for help about Asset Revaluation Reserve - smile74233 - 10-05-2010
CR Ltd purchased 100% of the voting shares of SAR Ltd on the 1 July 2008 for $1,450,000 in cash. The investment in SAR Ltd was one of several such investments by CR Ltd. At the date of acquisition the fair values of SAR Ltd¡¯s net assets were equivalent to their carrying amounts and there was no goodwill arising on the acquisition. CR Ltd measured its investment in SAR Ltd at cost.
On the 30 June, 2011 CR Ltd sold all of its investment in SAR Ltd to ANR Ltd for the cash sum of $2,050,000.
The net assets of SAR Ltd as at the date of acquisition and at the date of the sale of the investment are given below
1 July, 2008 30 June, 2011
Share Capital $1,000,000 ; $1,000,000
Asset Revaluation Reserve --- ; 375,000
Unappropriated Profits 450,000 ; 900,000
total $1,450,000 ; $2,275,000
During the year ended 30 June 2011 SAR Ltd generated revenues of $1,800,000 and expenses before tax of $1,600,000. The company income tax rate is 30% and no dividends had been declared by either company in the current financial year.
Questions
a) Prepare the general journal entry in CR Ltd¡¯s accounts to record the sale of the investment in SAR Ltd at 30 June 2011. Show all calculations. (6 marks)
4
b) Prepare any necessary entries in the consolidation worksheet for the year ended 30 June 2011 that would be required as a result of the sale of the investment in SAR Ltd. Show all calculations. (8 marks)
<b>I know the question is about accounting requirements for a parent entity¡¯s loss of control over a subsidiary and then prepare responses to the questions below.</b>Asset Revaluation Reserve
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Could anyone illustrate to me the solution of the question above?
Thank you very much
- wmahmooood - 10-27-2010
I think this might be of some help for you
http//www.online-home-jobs.com/2402.html