On 1 January 2014, Cowboys Ltd acquired all the issued shares in Tate Ltd. At that date,
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Question:
On 1 January 2014, Cowboys Ltd acquired all the issued shares in Tate Ltd. At that date, the plant of Tate Ltd had a fair value of $20 000 more than its carrying amount and an estimated useful life of 5 years. Tate Ltd depreciates the plant on a straight-line basis. The plant was sold during the year ended on 30 June 2015. The business combination valuation consolidation adjustment against plant in relation to the transaction as at 30 June 2015 will be:
Select one:
a. a debit of $20 000.
b. a credit of $20 000.
c. a debit of $4 000.
d. there is no adjustment entry recorded against the plant account.
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