Viola Ltd Has Significant Influence Over the Operations of Drum

question 1

Multiple Choice

Viola Ltd has significant influence over the operations of Drum Ltd from a 18% ownership.Viola Ltd prepares consolidated financial statements.Drum Ltd reported a profit of $5 000 000 and paid a cash dividend from post-acquisition profits of $180 000 to Viola Ltd.What is the difference between the balances of the account 'Investment in Drum Ltd' in Viola Ltd's own financial statements when compared with that balance in its consolidated financial statements for this year? The account balance in Viola Ltd's consolidated financial statements would be:

• A)higher by $867 600
• B)lower by $867 600
• C)higher by $720 000
• D)lower by $720 000

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Definitions:

Diagnostic Analytics

Diagnostic analytics is the process of examining data to understand the reasons behind past performance, focusing on identifying patterns, correlations, and cause-effect relationships.

Prescriptive

Relating to providing guidance or recommendations on what actions to take, often based on analytical models.

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Relating to the ability to use known data to forecast the value, trend, or likelihood of an event happening in the future.

Descriptive

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