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

question 31

Multiple Choice

On November 1 20X6,a parent entity Helios Ltd acquired 25% (500,000 shares) of the share capital of Havers Ltd and the power to significantly influence the operating and financial policies of that company for $4,000,000 cash.In the period from the date of acquisition to June 30 20X7,Havers Ltd earned a profit for the period of $500,000 (after tax of $200,000) and declared a dividend of $100,000.At June 30 20X7,Helios Ltd recognised its equity in the dividend.At June 30 20X7,the quoted market value of the shares in Havers was $10 per share.At June 30 20X7,in the separate balance sheet of Helios Ltd and in the consolidated balance sheet of the group controlled by Helios Ltd,the investment in Havers Ltd would be reported as:

• A) $4,000,000 and $4,100,000 respectively.
• B) $5,000,000 and $4,100,000 respectively.
• C) $5,000,000 and $5,100,000 respectively.
• D) None of the above.

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Definitions:

Compa-Ratios

A comparison ratio used in human resources to assess the relative pay level of an individual's salary to the midpoint of a salary range for their position.

Compa-Ratio

A metric that compares an individual's salary to the market average for similar positions.

Commissions

Payments made to employees or agents based on the sales or transactions they facilitate, typically a percentage of the sale value.

Merit Pay

A method of compensation where employees are paid based on their performance levels, often evaluated through a performance review process.