Devon Ltd Acquired 90% of Luka Ltd

question 7

Multiple Choice

Devon Ltd. acquired 90% of Luka Ltd. for $100,000 less than the fair value. How should this $100,000 be treated on Devon's consolidated financial statements?

• A)As goodwill on the consolidated statement of financial position
• B)Allocated as fair value increments over Luka's net identifiable assets
• C)As a gain on the consolidated statement of comprehensive income
• D)As a separate item under shareholders' equity

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Definitions:

Consecutive Red Cards

In card games or sports like soccer, instances where red cards are issued in sequential order, either to players or as drawn cards from a deck.

Black Card

Often refers to a high-tier, exclusive credit card that offers extensive benefits and is typically invitation-only.

Record

To capture and store information for future use or to denote an all-time high or low measurement in a specific context.

Probability Assignment Rule

A principle that assigns a probability to each outcome of a well-defined experiment in accordance with certain conditions.