On 1 January 20X0, Zed Ltd Acquired 90 % of the Share

question 16

Multiple Choice

On 1 January 20X0, Zed Ltd acquired 90 % of the share capital of Ned Ltd for $900 000 cash.At that date, the equity section of Ned Ltd's balance sheet was as follows:
$$\begin{array} { | c | r | } \hline & { \$ } \\\hline \text { Share capital } & 700000 \\\hline \text { Retained profits } & 50000 \\\hline \text { Asset revaluation reserve } & 100000 \\\hline\end{array}$$
Assume all assets and liabilities were recorded at their fair values, except for a piece of equipment recorded at $50 000 but Zed Ltd considers it to have a fair value of $100 000.This equipment is not revalued by Ned Ltd.The fair value of NCI under the full method was estimated as being $100 000.What was the difference on acquisition?

• A)Nil
• B)$100 000 goodwill
• C)$90 000 goodwill
• D)$50 000 goodwill

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Definitions:

Trials

In probability, the term refers to the execution of an experiment or the number of times an experiment is run.

Poisson Distribution

A statistical distribution showing the probability of a given number of events occurring in a fixed interval of time or space.

Discrete Probability Distribution

A mathematical function that represents the probabilities of occurrence of different possible outcomes for a discrete random variable.

Skewed To The Right

Describes a distribution of data where the tail on the right side of the histogram is longer or fatter than the left side, indicating that most of the data are concentrated to the left.