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    AnGGa's Avatar
    AnGGa Posts: 2, Reputation: 1
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    #1

    Mar 15, 2009, 12:43 AM
    Converting to a company Journal
    Lamy Ltd was incorporated on 1 July, to acquire the business of Happy Trading as a going concern. The consideration for the sale of the business is 43,000 shares issued at $1 each and 50 7% debentures of $100 each, maturing in ten years time.

    The assets and liabilities of Happy Trading were:
    Freehold Premises $40,000
    Plant and Equipment $30,000
    Accumulated Depreciation 5,000
    Inventory 12,500
    Accounts Receivable 75,000
    Allowance for doubtful debts 500
    Accounts Payable 18,000
    Bank Overdraft 2,000


    Parker Ltd assesses the fair value of assets acquired to be:
    Freehold Premises 75,000
    Plant and Equipment 15,000
    Inventory 12,500
    Accounts Receivable 6,000

    All liabilities of Happy Trading were accepted at book value by Lamy Ltd


    Required

    Prepare the general journal entries in the books of Parker Ltd to record:
    (I) The acquisition and the assets and liabilities of Happy Trading by Lamy Ltd including appropriate entries to record any goodwill or excess over cost on acquisition.

    (ii) The payment of the purchase consideration for Happy Trading by Lamy Ltd
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
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    #2

    Mar 15, 2009, 02:01 AM

    Are you aware that we are not really allowed to do these exercises for you ?
    AnGGa's Avatar
    AnGGa Posts: 2, Reputation: 1
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    #3

    Mar 15, 2009, 02:17 AM
    Quote Originally Posted by ROLCAM View Post
    Are you aware that we are not really allowed to do these exercises for you ?
    This is a HW question which I am having trouble with.. Thought someone could help
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