Curiosity Ltd Acquired All the Issued Share Capital of Cat

question 28

Multiple Choice

Curiosity Ltd acquired all the issued share capital of Cat Ltd on 1 July 20X1.Cat Ltd's shareholders equity (all at fair value) at that date was as follows:
$$\begin{array} { l r } & \mathbf { 0 0 0 } \mathrm { s } \\\text { Paid up capital } &\$4500\\\text { General reserve } & \$ 2000 \\\text { Asset revaluation reserve } & \$ 500 \\\text { General reserve } & \$1000 \\\text { Retained profits } & \$ 1500 \\\end{array}$$
At 1 July 20X1, Curiosity Ltd considered Cat Ltd had unrecorded licenses with a fair value of $1 500 000.What was the cost of acquisition (the fair value of the consideration paid) incurred by Curiosity Ltd, if $500 000 of consolidation goodwill from the business combination was recognised in the consolidated financial statements prepared on 1 July 20X1?

• A)$11 500 000
• B)$10 500 000
• C)$10 000 000
• D)$9 000 000

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Definitions:

Complex Tricks

Elaborate or sophisticated methods used to achieve a specific goal, often requiring skill and ingenuity.

Resistance To Extinction

The persistence of a learned behavior even when it is no longer reinforced, often observed in conditioning experiments.

Stimulus Generalization

The tendency for the conditioned response to be evoked by stimuli that are similar to the conditioned stimulus.

Resistance To Extinction

The phenomenon where a learned behavior persists even after the reinforcement previously maintaining it is removed, highlighting the behavior's resilience.