Fish Ltd Acquired an 80 Per Cent Interest in Chips

question 7

Multiple Choice

Fish Ltd acquired an 80 per cent interest in Chips Ltd on 1 July 2003 for a cash consideration of $838,000. At that date the fair value of the net assets of Chips Ltd was represented by:

On 30 June 2005 Fish Ltd sold all its shares in Chips Ltd for $950,000. At this date the fair value of the net assets of Chips Ltd was represented by:

The retained earnings of $490,000 includes operating profit after tax of $90,000 from the current period. Impairment of goodwill was assessed at $6,000. The investment has not been marked to market during the period that the shares were held. What is the amount of profit or loss on the sale of the shares recognised in the books of Fish Ltd during the period ended 30 June 2005?

• A) $14,000
• B) $112,000
• C) $20,000
• D) $118,000
• E) None of the given answers.

Understand the concept of marginal social cost and marginal social benefit in the context of pollution and externalities.

Comprehend the challenges associated with empirically measuring and regulating externalities.

Examine the significance of permit trading in pollution control and its efficiency implications.

Assess the impact of external benefits on the efficient provision of public goods and services such as education.

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Definitions:

Well-Being

A state of health, happiness, and prosperity.

Educational Attainment

The highest level of education that an individual has completed, often used as an indicator of socioeconomic status.

Lacks Reliability

A term indicating that a process, test, or result does not consistently produce the same measurements or outcomes under the same conditions, questioning its trustworthiness.

Lacks Validity

A term indicating that a measure or study does not accurately reflect or measure what it is supposed to.