Cool Ltd Acquired 4 Cool Ltd Paid $6

question 9

Multiple Choice

Cool Ltd acquired 4.5 million of the issued shares of Cat Ltd on 1 July 20X0 when the equity of Cat Ltd (at fair value) was as follows:
$\begin{array} { l l } \text { } & \$000s \\\text { Paid up capital (5 million shares) } & 4000 \\\text { Retained profits } & 1000 \\\text { General reserve } & 1000\end{array}$
Cool Ltd paid $6.5 million for this acquisition. On 1 July 20X1 Cat Ltd issued bonus shares in lieu of paying a dividend. The terms of the issue were 1 bonus share for every 4 shares held.
-What is the change in consolidation goodwill recognised in Cool Ltd's consolidated balance sheet as a result of this bonus issue?

---

Definitions:

Control Limits

Statistical boundaries on a control chart that indicate the acceptable range of a process or variation.

Standard Errors

Statistical measures that describe the amount of variability or dispersion for a sample statistic from the population parameter.

Average Run Length

This is a statistical term used to describe the average number of trials until a specified event occurs.

Control Limits

Defined in statistical quality control, control limits are the bounds within which a process metric is considered to be in a state of statistical control, beyond which indicates a potential issue needing investigation.