Accounting 9706 · AS & A Level · Business acquisition and merger

Business acquisition and merger — practice question

This question is about auditing and HJ Limited’s purchase of a business from Suhail.
(a)[5]

Read Source B in the insert. Advise Suhail whether his accounts ought to have been audited before HJ Limited examined them. Justify your answer.

(b(i))[7]

Prepare the Realisation account for Suhail’s books.

(b(ii))[7]

Prepare the capital account for Suhail’s books.

(c)[6]

Prepare the journal entry in HJ Limited’s records to show the purchase of Suhail’s business. A narrative is not needed.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Accounts present a true and fair view

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