On November 1 20X6,a Parent Entity Midstream Ltd Acquired 25

question 16

Multiple Choice

On November 1 20X6,a parent entity Midstream Ltd acquired 25% of the share capital of Delta Ltd and the power to significantly influence the operating and financial policies of that company for $5,000,000 cash.In the period from the date of acquisition to June 30 20X7,Delta Ltd earned a profit for the period of $400,000 (after tax of $200,000) and declared a dividend of $200,000.At June 30 20X7,Midstream Ltd recognised its equity in the dividend.For the year ended June 30 20X7,in the separate income statement of Midstream Ltd and in the consolidated income statement of the group controlled by Midstream Ltd,the equity in the profit before tax of Delta Ltd would be reported as:

• A) $200,000 and $100,000 respectively
• B) $50,000 and $150,000 respectively
• C) $50,000 and $120,000 respectively
• D) None of the above.

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Definitions:

Natural Experiments

Studies where the researcher takes advantage of a natural event to study its effects on subjects, without any manipulation by the researcher.

Abnormal Behaviors

Actions that deviate from the norm or societal expectations, often indicative of psychological issues or mental health disorders.

Stress

A physical, mental, or emotional factor that causes tension and may trigger bodily or psychological responses.

Generalized

A term used to describe conditions or responses that are widespread or not specific to one instance or area.