The Following Information Relates to Questions Nero Ltd Purchased a 30

question 17

Multiple Choice

The following information relates to questions Nero Ltd purchased a 30% per cent shareholding in Bianco Ltd on 1 January 20X8 for $180,000. Bianco Ltd’s assets recorded at fair values and its owners’ equity, totalling $520,000, was represented as follows: $\begin{array} { l r } \text { Share capital } & \$ 260,000 \\\text { Reserves } & \$ 120,000 \\\text { Retained profits } & \$ 100,000 \\\text { Asset revaluation reserve } & \$ 40,000\end{array}$
During July 20X8, Bianco Ltd paid an interim dividend of $18,000. At 31 December 20X8, Bianco Ltd reported: $\begin{array}{ll}\text { Profit for 20X8 } & \$ 48,000 \\\text { Final dividend payable } & \$ 14,000 \\\text { A transfer to the general reserve } & \$ 10,000 \\\text { Increase of the asset revaluation reserve to } & \$ 70,000\end{array}$
-The equity carrying amount of the investment in Bianco Ltd at 31 December 20X8 is:

• A) $199,200
• B) $202,200
• C) $203,400
• D) $211,200

Recognize the key financial ratios used to measure liquidity, profitability, and leverage.

Distinguish between the uses of different financial ratios in evaluating company performance.

Appreciate the impact of treasury stock transactions on financial ratios.

Comprehend the significance of financial analysis beyond the mechanical computation of ratios.

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Definitions:

Situational Theory

A theory that suggests leadership effectiveness depends on the specific situation, as well as the leader's personal style and the characteristics of the followers.

High Task Behaviors

Actions and activities prioritized by individuals or groups focusing on task completion and goal achievement, often at the expense of personal relationships.

Low Maintenance Behaviors

Actions or habits that require minimal effort to sustain but contribute significantly to positive relationships or environments.

Group Maintenance Role

Functions and actions taken by individuals within a group to foster cohesion, support, and the smooth operation of the group, contributing to its overall health and longevity.