Answer to Question #136449 in Finance for El

Question

Grant Limited recognised the following assets and liabilities in its financial statements at 30 June 2019:
Carrying amount Fair value
Property, plant and equipment
Inventory
Long term loan
Accounts payable 8 500 000
4 200 000
(3 500 000)
(1 650 000) 12 000 000
4 400 000
(3 500 000)
(1 650 000)
R7 550 000 R11 250 000

The current market interest rate for similar transactions is 8,5% per annum.
Scenario 1
Phakama Limited resolved to acquire all the assets and liabilities of Grant Limited on 1 July 2019, and agreed to pay R12 800 000 in cash on 1 July 2020 in full settlement of the acquisition.

Required:

Prepare the journal entries required in the records of Phakama Limited, relating to this transaction and the subsequent payment of the purchase consideration.

Answer 1

Dear El, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed: Submit order