Question
On 1 July 2020 King Limited obtained control of Gizzard Limited by acquiring six million shares in Gizzard. Gizzard has eight million issued share. The
On 1 July 2020 King Limited obtained control of Gizzard Limited by acquiring six million shares in Gizzard. Gizzard has eight million issued share. The purchase consideration comprised the following:
$5 million cash to be paid in two instalments. A first instalment of $4 million is due on 1 July 2020 and the remainder is due on 1 July 2021.
The issue of three shares in King for every four shares acquired in Gizzard. Kings share price at 1 July 2020 was $2 per share.
Kings incremental borrowing rate is 9%.
What is the value of the consideration transferred, in accordance with IFRS 3 Business Combinations?
|
| A. | $16,917,400. |
|
| B. | $17,000,000. |
|
| C. | $13,917,400. |
|
| D. | $14,000,000 |
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Managerial Accounting
Authors: John Wild
1st Edition
0073403989, 978-0073403984
