On 1 July 20X6,P Limited Acquired All the Issued Shares

question 4

Multiple Choice

On 1 July 20X6,P Limited acquired all the issued shares of S Limited for $50 000 when the equity of S Limited consisted of:
The pre-acquisition entry at 1 July 20X6 is:

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, reflecting time value of money.

Future Value

The value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today.

Discount Rate

The interest rate used to calculate the present value of future cash flows.

Present Values

The today's worth of a future cash amount or cash flow series, determined by a given rate of return.