pick from the multiple choice
Under the full goodwill method, a control premium is recognisedwhen:
| a. | the parent paid more than the fair value for the shares theyacquired. |
| b. | the parent paid less than the fair value for the shares theyacquired.
|
| c. | the consideration transferred by the parent is more than thefair value of the identifiable net assets acquired. |
| d. | the consideration transferred by the parent is less than thefair value of the identifiable net assets acquired. |
Fredericks Limited acquired the identifiable assets andliabilities of Nicole Limited for $134 000. The items acquired,stated at fair value, are: plant $72 000; inventories $40 000;accounts receivable $18 000; patents $10 000; accounts payable $16000. The difference on acquisition is:
| a. | gain on bargain purchase $10 000. |
| b. | gain on bargain purchase $16 000. |
| c. | goodwill of $10 000. |
| d. | goodwill of $124 000. |
Xana Limited paid $110 000 for 60% of the shares in YamaLimited. At the date of acquisition Yama Limited had share capitalof $100 000 and retained earnings of $36 000 and all of YamaLimited’s assets and liabilities were recorded at fair value,except for land that was recorded at an amount less than the fairvalue by $20 000. The company tax rate was 30%. The fair value ofidentifiable net assets acquired by Xana Limited amounted to:
| a. | $60 000. |
| b. | $90 000. |
| c. | $110 000. |
| d. | $150 000. |
