Generally Accepted Accounting Principles and Non-current Tangible Assets
Chapter 7 Solutions
7.3 Raven
Assets taken over
Plant and machinery
Furniture and fittings
Inventories
Trade receivables
Brand
Liabilities
Identifiable net tangible assets
Consideration transferred
Goodwill
RM
340,000
40,000
60,000
60,000
100,000
600,000
(22,000)
578,000
650,000
72,000
Debit
RM
To record the purchase price
Gimmick
Realisation account
(Being the agreed purchase price.)
Assets taken over
Realisation account
Trade payable
Accumulated depreciation - Plant
Accumulated depreciation - furniture
Plant and machinery
Furniture and fittings
Inventories
Trade receivables
(Being assets and liabilities disposed off.)
Realisation account
Bank
(Being liquidation expenses)
Realisation account
Capital
Preference shares in Gimmick
Ordinary shares in Gimmick
Gimmick
(Being purchase consideration received.)
Credit
RM
650,000
650,000
278,000
22,000
36,000
38,000
400,000
80,000
50,000
64,000
1,000
1,000
151,000
151,000
100,000
550,000
650,000
Capital
Preference shares in Gimmick
Ordinary shares in Gimmick
Bank
651,000
100,000
550,000
1,000
Business Purchase Account
RM
Syarikat Raven
650,000
Plant and machinery
Provision for doubtful debts
2,000
Furniture and fittings
Trade payable
22,000
Inventories
Trade receivables
Brand
Goodwill
674,000
RM
340,000
40,000
60,000
62,000
100,000
72,000
674,000
Gimmick
Statement of financial position as at 1.1.x5
RM
Plant and machinery (cost)
Furniture and fittings (cost)
Goodwill
Brand
RM
340,000
40,000
72,000
100,000
Current assets
Inventories
Trade receivables (less provision for doubtful debts)
Bank
Issued and paid up capital
Ordinary shares
Preference shares
Share premium
Current liabilities
Trade payables
60,000
60,000
9,000
129,000
671,000
500,000
100,000
49,000
22,000
671,000
7.4 Nuts and Bolts
Debit
RM’000
To record the purchase price
Hammer
Realisation account
7.3 Raven
Assets taken over
Plant and machinery
Furniture and fittings
Inventories
Trade receivables
Brand
Liabilities
Identifiable net tangible assets
Consideration transferred
Goodwill
RM
340,000
40,000
60,000
60,000
100,000
600,000
(22,000)
578,000
650,000
72,000
Debit
RM
To record the purchase price
Gimmick
Realisation account
(Being the agreed purchase price.)
Assets taken over
Realisation account
Trade payable
Accumulated depreciation - Plant
Accumulated depreciation - furniture
Plant and machinery
Furniture and fittings
Inventories
Trade receivables
(Being assets and liabilities disposed off.)
Realisation account
Bank
(Being liquidation expenses)
Realisation account
Capital
Preference shares in Gimmick
Ordinary shares in Gimmick
Gimmick
(Being purchase consideration received.)
Credit
RM
650,000
650,000
278,000
22,000
36,000
38,000
400,000
80,000
50,000
64,000
1,000
1,000
151,000
151,000
100,000
550,000
650,000
Capital
Preference shares in Gimmick
Ordinary shares in Gimmick
Bank
651,000
100,000
550,000
1,000
Business Purchase Account
RM
Syarikat Raven
650,000
Plant and machinery
Provision for doubtful debts
2,000
Furniture and fittings
Trade payable
22,000
Inventories
Trade receivables
Brand
Goodwill
674,000
RM
340,000
40,000
60,000
62,000
100,000
72,000
674,000
Gimmick
Statement of financial position as at 1.1.x5
RM
Plant and machinery (cost)
Furniture and fittings (cost)
Goodwill
Brand
RM
340,000
40,000
72,000
100,000
Current assets
Inventories
Trade receivables (less provision for doubtful debts)
Bank
Issued and paid up capital
Ordinary shares
Preference shares
Share premium
Current liabilities
Trade payables
60,000
60,000
9,000
129,000
671,000
500,000
100,000
49,000
22,000
671,000
7.4 Nuts and Bolts
Debit
RM’000
To record the purchase price
Hammer
Realisation account