Financial Statements Help Needed! (Badly!)

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monkeyrage
monkeyrage Registered Posts: 24 New contributor 🐸
Hi,

Just wondering if anyone can point me in the right direction so I can finally kick start this unit!! Just attempted my first online assignment for Premier Training and have definitely come across a mental block!

On 1 August 2009 the company purchased and absorbed Paxman Ltd as a going concern. Muggeridge Ltd acquired Paxman's sole asset of inventory for £40,000 and in addition paind £100,00 for goodwill. The consideration of £140,000 was paid for by the issue of 100,000 ordinary shares of £1. This transaction has not yet been recorded in the books of Muggeridge Ltd. The purchased good will has an estimated economic life of 10 years from 1 August 2009.

Would this adjustment affect the ledger accounts for Purchases, Goodwill and Ordinary Share Capital only? If so, could anyone point me in the direction of what to do!!

Do I debit Ordinary Share Capital by £100,00? Debit Goodwill by £100,000 or £10,000?

Really just need some pointers please guys, or a kick up the backside!! :-D

Any help is much appreciated!!

Cheers.

Comments

  • beavis182
    beavis182 Registered Posts: 130 Dedicated contributor 🦉
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    I was stuck on the same bit and couldnt find enough information in the tutorials supplied that helps with that section of the assignment. The rest was easy but i missed out that part of it.
  • meibaker
    meibaker Registered Posts: 481 Dedicated contributor 🦉
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    hi, what online assignment? i am with premier training, but never heard of this before!
  • noodles
    noodles Registered Posts: 308 Dedicated contributor 🦉
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    monkeyrage wrote: »
    Hi,

    Just wondering if anyone can point me in the right direction so I can finally kick start this unit!! Just attempted my first online assignment for Premier Training and have definitely come across a mental block!

    On 1 August 2009 the company purchased and absorbed Paxman Ltd as a going concern. Muggeridge Ltd acquired Paxman's sole asset of inventory for £40,000 and in addition paind £100,00 for goodwill. The consideration of £140,000 was paid for by the issue of 100,000 ordinary shares of £1. This transaction has not yet been recorded in the books of Muggeridge Ltd. The purchased good will has an estimated economic life of 10 years from 1 August 2009.

    Would this adjustment affect the ledger accounts for Purchases, Goodwill and Ordinary Share Capital only? If so, could anyone point me in the direction of what to do!!

    Do I debit Ordinary Share Capital by £100,00? Debit Goodwill by £100,000 or £10,000?

    Really just need some pointers please guys, or a kick up the backside!! :-D

    Any help is much appreciated!!

    Cheers.
    dr purch 40 k, dr goodwill 100 k cr share cap 100k cr share prem 40 k cr share cap 140 k dr share prem 140 k

    dont forget to amortise the goodwill
    go through the above to make sure that you understand it before just handing in the paper. nicky
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    Dr Goodwill 100k
    Dr Current assets stock 40k

    Cr Share capital 100k
    Cr Share premium 40k


    Then amortise goodwill at 10% per year. ie cr goodwill 10k and dr P&L 10k
  • Gem7321
    Gem7321 Registered Posts: 1,438 Beyond epic contributor 🧙‍♂️
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    nscuffell wrote: »
    cr share cap 140 k dr share prem 140 k
    I don't think this is right. Agree with PGM.

    Dr purchases 40,000
    Dr goodwill 100,000
    Cr share capital 100,000
    Cr share premium 40,000
  • monkeyrage
    monkeyrage Registered Posts: 24 New contributor 🐸
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    Thanks for the help guys! Much appreciated! I found little help in my Osbourne textbook for this given task, you's were all a great help :-)

    Meibaker - I have just recently enrolled on the new standards Level 4 Diploma with Premier Training, could this be why you've never heard of it?
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