Accounting Barren Garry Ltd Financial Analysis Paper

Accounting Barren Garry Ltd Financial Analysis Paper

Accounting Barren Garry Ltd owns a number of sustainable pine forest plantations, and has been a supplier of certified Hoop Pine to Oladele Timber Mill Ltd for many years. The owners have invested heavily in research and development over the years, particularly in sustainable practices for planting and harvesting timber and the use of low residue herbicides. Oladele Timber Mill Ltd operates a saw mill and timber yard on the South Coast of New South Wales and supplies timber to retailers in Sydney, Canberra and locally. Oladele Timber Mill Ltd acquired 10% of the shares of Barren Garry Ltd for $165,000 on 1 July 2029. The shares were last revalued to their fair value of $220 000 in the financial statements for the year ended 30 June 2034. A takeover offer for the remaining shares was launched in the next financial year and on was concluded on 31 May 2035 as follows:

• Oladele Timber Mill Ltd (UTM) acquired the remaining 90% of the issued shares (ex div.)
• UTM paid the shareholders of Barren Garry Ltd by issuing 50 000 ordinary shares and making a cash payment of $295 000.
• The ordinary shares issued by UTM has a fair value of $40.00 per share
• On this date, the 10% shareholding in Barren Garry Ltd had a fair value of $230 000
• UTM incurred share issue and registry costs of $5 200 (paid in July 2035)
• UTM incurred valuation fees, fees for accounting and taxation advice and legal costs associated with the business acquisition totaling $32,000 (paid in August 2035). At 31 May 2035, the equity of Barren Garry Ltd was as follows:
• Share capital $1 500 000
• General reserve $150 000
• Retained earnings $660 000 All the identifiable assets and liabilities of Barren Garry Ltd were recorded at amounts equal to their fair

 

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