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On 1 July 2018, Kiwi Ltd purchased 40% of the shares of Fruit Ltd at a cost of $240,000
On 1 July 2018, Kiwi Ltd purchased 40% of the shares of Fruit Ltd at a cost of $240,000. Kiwi Ltd does not control Fruit Ltd but does have significant influence. The carrying amounts of Fruit Ltd’s net assets (at fair value) at date of acquisition were as follows:
|
Equity |
1/7/2018 |
|
Share capital |
430,000 |
|
Asset Revaluation Surplus |
20,000 |
|
Retained earnings |
110,000 |
The following information relates to Fruit Ltd for 30/6/19 and 30/6/20:
|
30/6/19 |
30/6/20 |
|
|
Profit/loss after tax |
260,000 |
140,000 |
|
Dividend paid |
- |
50,000 |
|
Asset Revaluation Surplus |
20,000 |
24,000 |
Required
Prepare the journal entries required by Kiwi Ltd relating to its Investment in Fruit Ltd and subsequent transactions for the period from 1 July 2018 to 30 June 2020. Kiwi Ltd is not a parent entity.
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