Question
A Ltd acquires all the net assets of B Ltd and applies the requirements of AASB 3 Business Combinations. Details regarding the net assets of
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A Ltd acquires all the net assets of B Ltd and applies the requirements of AASB 3 Business Combinations. Details regarding the net assets of B Ltd are as follows:
Carrying amount Fair value $ $ Assets Cash 50,000 50,000 Furniture 20,000 15,000 Fittings 40,000 20,000 Accounts receivable 25,000 20,000 Goodwill 10,000 10,000 Liabilities Accounts payable 20,000 20,000 Assume A Ltd issues 100,000 shares at $1.50 each to acquire the net assets of B Ltd. The acquisition analysis would disclose the fair value of the identifiable net assets of B Ltd and the consideration transferred as:
'Fair value of identifiable net assets' $85,000
'Consideration transferred' $100,000
'Fair value of identifiable net assets' $95,000
'Consideration transferred' $150,000
'Fair value of identifiable net assets' $85,000
'Consideration transferred' $150,000
'Fair value of identifiable net assets' $125,000
'Consideration transferred' $100,000
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