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On 1 July 2012,Goliath Ltd Acquires All Shares in David

question 24

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On 1 July 2012,Goliath Ltd acquires all shares in David Ltd for $800 000.The fair value of net assets acquired is $920 000 comprised of $600,000 in share capital and $320 000 in retained earnings.What is the appropriate elimination entry for this investment that is in accordance with AASB 3 "Business Combinations" and AASB 127 "Consolidated and Separate Financial Statements"?


Definitions:

Top-Down Managerial

A management approach where decision-making and direction come from the top levels of the organization and flow downward.

Profit-Making Businesses

Enterprises or organizations that operate with the primary goal of earning financial profits.

Budgetary Slack

Excess resources set within a budget to provide for uncertain events.

Operational Plans

Detailed plans that outline how a strategy will be implemented in terms of day-to-day operations.

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