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
$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. King’s share price at 1 July 2020 was $2 per share.
King’s 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 |
Step by Step Solution
3.33 Rating (150 Votes )
There are 3 Steps involved in it
Step: 1
tin lultin f ttl nside...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Intermediate Accounting
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
Volume 1, 6th Edition
1259103250, 978-1259103254, 978-0071339476
