On 1 July 2019 Debbie Ltd Acquired a 100% Interest

question 19

Multiple Choice

On 1 July 2019 Debbie Ltd acquired a 100% interest in Stefan Ltd. At that date Stefan Ltd had goodwill of $6 000 recorded in its statement of financial position as a result of a previous business combination. The total goodwill arising on Debbie's acquisition of Stefan was $16 000. The goodwill to be recognised on consolidation as a result of Debbie's acquisition of Stefan is:

• A) nil.
• B) $6 000.
• C) $7 000.
• D) $10 000.

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Definitions:

Asset Value

The monetary worth of physical or intangible property owned by an individual or business.

Deadline

A specific date or time by which a task, project, or assignment must be completed.

Corporate Price

The price at which a corporation offers its products or services to customers, often influenced by costs, market demand, and competitive landscape.

Overbooking

The practice, often used in the travel and hospitality industry, of accepting more reservations than there is available capacity, based on predictions of last-minute cancellations.