Question: Bamburg Ltd’s Retained Earnings At The Date Of Acquisition Was $ 135,000. No Ordinary Shares Were Issued/ Redeemed By The Subsidiary Since Acquisition. The Group Used The Proportion Of The Net Assets Of The Subsidiary Company To Measure Non-controlling Interest. Bamburg Ltd Holds A Patent Which Has Not Been Recognized In Its Financial Statements. …

Bamburg Ltd’s retained earnings at the date of acquisition was $
135,000. No ordinary shares were issued/ redeemed by the subsidiary
since acquisition. The group used the proportion of the net assets
of the subsidiary company to measure non-controlling interest.
Bamburg Ltd holds a patent which has not been recognized in its
financial statements. The directors of Trifles Ltd are of the
opinion that the patent should be accounted. The patent had a fair
value of $ 125,000 and a remaining term four years to go as from
the date of acquisition. With regards to Bamburg Ltd’s Property and
Plant, it is noted that the asset had a lifetime of five years at
the acquisition date and the carrying value of Property and Plant
was greater than the fair value by $ 40,000 on the acquisition
date. Included within the intangible assets of Bamburg Ltd is
goodwill of $ 5,000 which arose on the purchase of the trade and
assets of a sole-trader business. b) (i) Calculate the net assets
of the subsidiary at the acquisition date and reporting date (30
June 2020). [11 Marks] (ii) Calculate the goodwill at acquisition
date. [2 Marks] (iii) Calculate the group retained earnings as at
30 June 2020. [3 Marks] c) Assume that Trifles Ltd has only
recorded the cash transaction of $ 565,000. Prepare the
consolidated Statement of Financial Position (Equity and
Liabilities section only) to show how the deferred consideration
and the share exchange should be accounted for the year ended 30
June 2020. [10 Marks]