Jabba Ltd Acquired a 70 Per Cent Interest in Han

question 28

Multiple Choice

Jabba Ltd acquired a 70 per cent interest in Han Ltd on 30 June 2012 for €2 000 000.On the same date,Han Ltd acquired a 60 per cent interest in Leia Ltd for a cash consideration of €1 600 000.The purchase price represents the fair value of consideration transferred for both investments.The share capital and retained earnings at the date of acquisition are as follows: $$\begin{array} { | l | r | r | } \hline & \text { Han Ltd } & \text { Leia Ltd } \\\hline \text { Share capital } & 2000000 & 1600000 \\\hline \text { Retained earnings } & \underline { 600000 } & \underline { 800000 } \\\hline & \underline { 2600000 } & \underline { 2400000 } \\\hline\end{array}$$ What is the non-controlling interest in Han Ltd and Leai Ltd,respectively on the date of acquisition using the full goodwill method (round to the nearest dollar) ?

• A)€780 000; €960 000
• B)€857 143; €1 066 667
• C)€1 820 000; €1 440 000
• D)€2 857 143; €2 666 667

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Definitions:

Buy-in

The agreement or commitment of individuals or groups to fully support and participate in a project or idea.

Rapport

is the establishment of a trusting and harmonious relationship, especially in a professional or therapeutic setting.

Engagement

The degree of attention, curiosity, interest, optimism, and passion that students show when they are learning or being taught.

DSM Published

Refers to the publication of the Diagnostic and Statistical Manual of Mental Disorders, a handbook used by healthcare professionals as the authoritative guide to diagnosing mental disorders.