Jabba Ltd Acquired a 70 Per Cent Interest in Han

question 25

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 partial 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)€2 000 000; €1 600 000

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Definitions:

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