Assignment Detail

Assignment ID: FG132525960

Howard Ltd is seeking to expand its share of the widgets market and has negotiated to take over the operations of Falcon Ltd on 1 January 2021. The statements of financial position of the two companies as at 31 December 2020 were as follows.
                                                  Howard Ltd ($)                                   Falcon Ltd ($)
Cash                                                 22,900                                      11,510
Accounts receivable                             26,650                                      34,899
Inventories                                          36,570                                      25,828
Freehold land                                      136,800                                     92,000
Buildings (net)                                       65,630                                    28,230
Plant and equipment (net)                         69,550                                   43,620
Goodwill                                               26,460                                     1,800
                                                            $384,560                             $237,887
Accounts payable                                     59,830                                45,755
Mortgage loan                                          47,300                                  43,370
Debentures                                             108,600                                     50,050
Share capital                                      – 99,200 shares 99,200 –          – 61,530 shares – 61,530
Other reserves                                          26,860                                       27,481
Retained earnings                                       42,770                                    9,701
                                                              $384,560                                   $237,887
Howard Ltd is to acquire all the identifiable assets, except cash, of Falcon Ltd. The assets of Falcon Ltd are all recorded at fair value except:
Fair value ($)
Inventories 38,159
Freehold land 122,300
Buildings 37,280
In exchange, Howard Ltd is to provide sufficient extra cash to allow Falcon Ltd to repay all of its outstanding debts and its liquidation costs of $2,579, plus two fully paid shares in Howard Ltd for every three shares held in Falcon Ltd. The fair value of a share in Howard Ltd is $3.
Costs of issuing the shares were $1,165.
Question 1: Prepare the acquisition analysis to record the business combination in the records of Howard Ltd.

Net fair value of assets and liabilities acquired $
Consideration transferred $
Gain on bargain purchase/ Goodwill $