Question
GoApp Ltd acquired all the issued capital of Rockbet Ltd on 1 July 2018. At the date of acquisition, all the assets and liabilities of
GoApp Ltd acquired all the issued capital of Rockbet Ltd on 1 July 2018. At the date of acquisition, all the assets and liabilities of Rockbet Ltd were carried at fair value except for an internally developed database of potential customers, which was not recognized by Rockbet Ltd in its own books. Based on a valuation report, GoApp Ltd assesses a fair value of $120,000 for this database and believes it will generate future benefit for the next six years.
Which of the following consolidation adjusting entries is required on 30 June 2020?
Group of answer choices
Dr Database $120,000; Cr FVA $84,000; Cr DTA $36,000
No consolidation entries are required since the marketing channel is not recognized as an asset
Dr Retained earnings $120,000; Cr FVA $84,000; Cr ITE $36,000
Dr Database $120,000; Cr FVA $84,000; Cr DTL $36,000
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