Assets of Argus Ltd Include a Plot of Land Purchased $\quad$

question 12

Multiple Choice

Assets of Argus Ltd include a plot of land purchased for $40 000.On 1 January 20X0 Argus became a subsidiary of Cyclops Ltd.The land was sold on 30 March 20X9 for $350 000.The land's fair value at the following dates was:
1 January 20X0 $\quad$$\quad$$\quad$ $100 000
31 December 20X3 $\quad$$\quad$ $270 000
31 December 20X6 $\quad$$\quad$ $240 000
31 December 20X8 $\quad$$\quad$ $360 000
The group applies the cost model.The carrying amount of the land immediately before control date is $40 000.
What is the correct consolidation data adjustment entry for 31 December 20X6?

• A)
• \(\begin{array}{lcc}
• \text { Dr Land } &\$60000 & \\
• \text {Cr. Fair value reserve} & & \$60000
• \end{array}\)
• B)
• \(\begin{array}{lcc}
• \text { Dr Land } &\$60000 & \\
• \text {Cr. Asset revaluation reserve } & & \$60000
• \end{array}\)
• C)
• \(\begin{array}{lcc}
• \text { Dr Land } &\$200000 & \\
• \text {Cr. Fair value reserve } & & \$200000
• \end{array}\)
• D)
• \(\begin{array}{lcc}
• \text { Dr Land } &\$200000 & \\
• \text {Cr. Asset revaluation reserve } & & \$200000
• \end{array}\)

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Definitions:

Sodium Hydroxide

A highly caustic metallic base and alkali salt, commonly known as lye or caustic soda, used in various industrial processes.

Carbonyl

A functional group in organic chemistry consisting of a carbon atom double-bonded to an oxygen atom.

Acetone

A volatile, flammable liquid used as a solvent and an antiseptic, known chemically as propanone.

Synthesize

To combine simpler substances chemically to form a more complex substance, often used in reference to the production of chemical compounds in a laboratory.