Use the Following Information to Answers

question 12

Multiple Choice

Use the following information to answers
Edward Ltd acquires all issued shares in Jacob Ltd for $220 000 paid in cash. Equity of Jacob Ltd consists of $130 000 share capital and $45 000 retained earnings. At acquisition date, Jacob Ltd owns a block of land, which it initially purchased at $200 000. The fair value of the land is $240 000. The carrying amount of Jacob Ltd's property, plant and equipment is $130 000 with accumulated depreciation of $55 000. The fair value of the property, plant and equipment is $95 000.
-Which of the following statements is correct about the above business combination?

• A) There is gain on bargain purchase of $45 000 to be recognised.
• B) There is goodwill of $45 000 to be recognised.
• C) There is gain on bargain purchase of $3000 to be recognised.
• D) There is goodwill of $3000 to be recognised.

Recognize the calculation and categories of current assets, including exceptions.

Differentiate among various income statement line items and their implications on business performance.

Know the principles and applications of depreciation, including its accounting treatment and impact on profits and cash flow.

Detail the management behaviors influenced by accounting practices, particularly in relation to inventory, accounts receivable, and bonus incentives.

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Definitions:

Realized Niche

The actual conditions and resources in which a species exists due to constraints from other species, such as competition, predation, and availability of resources.

Gleason's Individualistic Model

A concept in ecology suggesting that plant communities are loose assemblages of species coexisting primarily due to similar abiotic requirements rather than biotic interactions.

Community Structure

The organization, composition, and arrangement of species within an ecological community, including their relationships and interactions.

Limiting Resources

Essential resources that are in short supply, thus limiting the growth, abundance, or distribution of an organism or population.