Question 2: Business Combinations (20 marks) Manna Ltd. enters into a business combination with Noah Inc. on January 1, Year 5. To complete the business combination, Manna issued 50,000 of its

common shares which is currently trading at $8.00 per share. Manna is considered to be the clear acquirer. Costs associated with the business combination are: Acquisition cost of $5,000; and • Costs of issuing shares of $7,000 . Statement of financial position for the two companies immediately before the business combination are below: Cash Accounts Receivable Inventory Equipment (net) Buildings (net). Land Total Current liabilities Long-term debt Common shares Retained earnings Total Manna Ltd. Book Value 140,000 167,100 374,020 78,880 250,000 415,000 1,425,000 54,800 110,000 350,000 910,200 1,425,000 Fair Value 140,000 155,000 388,900 67,000 546,000 845,000 54,800 105,000 Required 1 Assuming that Manna acquired the net asset of Noah Inc., Noah Inc. Book Value 52,500 61,350 110,110 21,020 17,750 105,000 367,730 41,160 150,000 100,000 76,570 367,730 Fair Value 52,500 56,200 134,000 24,020 15,950 210,000 41,160 155,000 ENG (2/nRequired 1 Assuming that Manna acquired the net asset of Noah Inc., • Calculate any goodwill created at the time of the business combination. (3 marks) Prepare the journal entries on Manna's books to record the business combination. (8 marks) Prepare Manna's statement of financial position immediately after the business combination. Use an appropriate three line title. (4 marks) ● Required 2 Assuming that Manna acquired the 100% shares of Noah Inc., prepare the journal entries on Manna's books to record the business combination. (5 marks) Instructions Complete the assignment in Word or Excel. No pdf, gif, png documents will be accepted for grading Show all calculations for credit. Use of Turnitin To uphold academic integrity, Turnitin will be used in this assessment. By submitting your work through Turnitin, Turnitin's software will compare your work against a repository of internet and library resources in addition to the work of your peers and other academics to generate a similarity report This similarity report verifies that your work is your own and that any prime viden www ENG