Mickey Ltd Acquired a 70 Per Cent Interest in Mouse

question 6

Multiple Choice

Mickey Ltd acquired a 70 per cent interest in Mouse Ltd on 1 July 2003 for a cash consideration of $1,700,000. At that date the shareholders' funds of Mouse Ltd were:

The assets of Mouse Ltd were recorded at fair value at the time of the purchase.
On 1 July 2005 Mickey Ltd purchased a further 20 per cent of the issued capital of Mouse Ltd for a cash consideration of $530,000. At this date the fair value of the net assets of Mouse Ltd were represented by:

Impairment of goodwill was assessed at $9,000; of which $5,000 relates to the current period. There were no intragroup transactions. What are the consolidation entries to eliminate the investment in the subsidiary and account for goodwill for the period ended 30 June 2006?

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Definitions:

Criminal

A person who has committed a crime or has been legally convicted of a crime.

Steal

The act of taking something without permission or legal right and without intending to return it.

Consumer

An individual or group who uses goods and services produced within an economy.

Specific Product

A particular good or service that is distinct because of its brand, model, or other identifying characteristic.