The Following Information Relates to Questions
on 1 January

question 2

Multiple Choice

The following information relates to questions
On 1 January 20X3, Claudia Ltd, an Australian company, acquired 80% of the shares of Saskia Ltd, a New Zealand company, for A$2 498 000. At that date the share capital of Saskia was NZ$2 million and the retained earnings were NZ$1 440 000.

All the assets and liabilities of Saskia were recorded at fair value except for land, for which the fair value was NZ$200 000 higher than the carrying amount and equipment, for which the fair value was NZ$80 000 higher than the carrying amount. The undervalued equipment had a further 4-year life. The tax rate in New Zealand is 25%.

Exchange rates are as follows:
$\begin{array}{ll}1 \text { January 20X3 } & \mathrm{A} \$ 1.00=\mathrm{NZ} \$ 1.20 \\31 \text { December 20X3 } & \mathrm{A} \$ 1.00=\mathrm{NZ} \$ 1.40 \\\text { Average for the year } & \mathrm{A} \$ 1.00=\mathrm{NZ} \$ 1.30\end{array}$
-The goodwill arising on Claudia's acquisition of Saskia is:

• A) NZ$77 600;
• B) NZ$88 800;
• C) A$93 120;
• D) A$422 000.

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Definitions:

Acquisition

The process of learning or acquiring new information or behaviors.

Selective Filter

A cognitive process by which individuals screen and select information to focus on, disregarding other information.

Nonselective Nature

Describes a process or substance that does not discriminate between different targets or types, affecting or interacting with multiple systems or elements simultaneously.

Stimuli

External factors or conditions that elicit responses from organisms or biological systems.