P Ltd Acquired 80% of S Ltd for a Consideration

question 33

Multiple Choice

P Ltd acquired 80% of S Ltd for a consideration of $500 000.At the date of acquisition,the following information is available: $\begin{array}{l}\text { S Ltd issued capital } &\$350,000\\\text { Retained earnings } &\$ 160,000 \\\text { Fair value of land }& \$ 200,000\\\text { (carrying amount } \$ 100000 \text { ) }\\\text { Fair value of } \mathrm{NCl}&\$150,000\\\text { Tax rate } 30 \%\end{array}$
-Using the proportionate interest goodwill method,goodwill on acquisition is:

• A) $92 000.
• B) $12 000.
• C) $36 000.
• D) none of the above.

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Definitions:

Excessive Optimism

An overly positive outlook or expectation, which may result in unrealistic planning or underestimated risks.

Inspirational Motivation

The ability to motivate others through the articulation of an appealing vision and ambitious goals.

Appealing Vision

A compelling and inspiring outlook or plan for the future that motivates people to aim towards it.

Personal Identification

A psychological process by which an individual associates themselves with someone else's attributes or the characteristics of a group.