On 1 July 2017 Fred Ltd Acquired 30% of the Shares

question 23

Multiple Choice

On 1 July 2017 Fred Ltd acquired 30% of the shares of Barney Ltd for $240 000. At that date, the equity of Barney Ltd was $800 000, with all identifiable assets and liabilities being measured at fair value. Profits/(losses) made since the date of acquisition are as follows: $\begin{array}{|r|r|}\hline \text { Year ended }&\text { Profit/(Loss) } \\\text { 30 June }& \$ \\\hline 2018 & 40000 \\\hline 2019 & (360000) \\\hline 2020 & (500000) \\\hline 2021 & 15000 \\\hline 2022 & 44000 \\\hline\end{array}$ There have been no dividends paid or movements in reserves since the date of acquisition.
At 30 June 2021 the equity accounted balance of the investment in Barney was:

• A) $0
• B) $4 500
• C) ($1 500)
• D) $240 000

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