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

question 17

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 subsidiary applies the cost model and the group applies the revaluation 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 20X3?

• A)
• \(\begin{array}{lcc}
• \text { Dr Land } &\$60000 & \\
• \text {Cr. Fair value reserve } & & \$60000
• \end{array}\)
• B)
• \(\begin{array}{lcc}
• \text { Dr Land } &\$170000 & \\
• \text {Cr. Fair value reserve} & & \$170000
• \end{array}\)
• C)
• \(\begin{array}{lcc}
• \text { Dr Land } &\$170000 & \\
• \text {Cr. Fair value reserve} & & \$170000
• \end{array}\)
• D)None of the above

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Definitions:

Quality and Design

Aspects of products or services that dictate their overall appeal, functionality, and satisfaction to the consumer.

Collusively

Collusively involves cooperating in a secretive or illegal manner, often used to describe businesses that agree to fix prices or divide markets amongst themselves.

Degrees of Competition

The spectrum of market structures that varies from one extreme of perfect competition to the other of monopoly, including monopolistic competition and oligopoly in between.

Oligopoly

A market structure dominated by a small number of large companies, leading to limited competition.