XYZ Limited Paid $2 Million for 100 Per Cent of the Voting

question 29

Multiple Choice

XYZ Limited paid $2 million for 100 per cent of the voting shares of ABC Limited and determined the assets to be worth $3 million and the liabilities $800 000.What was the goodwill on consolidation at the date of acquisition?

• A) $100 000
• B) $200 000
• C) $300 000
• D) None of the answers provided

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Definitions:

Evaluation

Evaluation involves the systematic assessment of the value, performance, or importance of an object, project, or program, based on relevant criteria or standards.

Gestalt Psychology

A theory of mind that proposes humans naturally perceive objects as organized patterns and wholes, rather than as separate components.

Principle of Similarity

A concept from Gestalt psychology that states individuals tend to perceive elements as grouped together if they are similar to each other in shape, color, size, or other attributes.

Physical Characteristics

The observable attributes or features of an object, person, or place.