Fish Ltd Acquired an 80 Per Cent Interest in Chips

question 9

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 impairment having been incurred evenly across the last two years. The investment has not been marked to market during the period that the shares were held. What is the elimination entry required for the consolidated accounts?

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Definitions:

Cilia

Microscopic, hair-like structures on the surface of cells, which move in a wave-like fashion to transport substances.

Cranial Nerves

Nerves that emerge directly from the brain, in contrast to spinal nerves, and are numbered from I to XII, each with specific functions related to senses and movement.

Organ of Corti

The sensory organ located within the cochlea of the inner ear, critical for the process of hearing by converting sound vibrations into neural signals.

Nerve Impulses

Nerve impulses are electrical signals that travel along neurons, facilitating communication within the nervous system.