On 1 January 20X7,a Parent Entity,Emborough Ltd,acquired 20% of the Share

question 40

Multiple Choice

On 1 January 20X7,a parent entity,Emborough Ltd,acquired 20% of the share capital of Bernborough Ltd and the power to significantly influence the operating and financial policies of that company for $4 500 000 cash.In the period from the date of acquisition to 30 June 20X7,Bernborough Ltd earned a profit for the period of $400 000 (after tax of $200 000) ,recognised a post-acquisition asset revaluation increment of $500 000 (deferred tax liability $100 000) and declared a dividend of $200 000.At 30 June 20X7,Emborough Ltd recognised its equity in the dividend. In the consolidated balance sheet at 30 June 20X7 of the group controlled by Emborough Ltd,the investment in the associate would be reported at an amount of:

• A) $4 620 000.
• B) $4 500 000.
• C) $4 680 000.
• D) none of the above.

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Definitions:

Intrinsic Motivation

A drive to engage in activities for their own sake, deriving pleasure and satisfaction from the activity itself rather than from external rewards.

For Its Own Sake

Undertaking an activity for the pleasure and value derived directly from the activity itself, rather than for achieving an external goal.

Biologically Determined

Refers to traits, behaviors, or conditions that are influenced by genetic makeup rather than the environment.

Instinct

An innate, typically fixed pattern of behavior in animals in response to certain stimuli that is primarily genetically coded.