Question
Suppose that Des Ltd paid $900,000 for the shares in Bo Ltd, which of the following correctly describes the accounting procedures for 1 July 20X3,
Suppose that Des Ltd paid $900,000 for the shares in Bo Ltd, which of the following correctly describes the accounting procedures for 1 July 20X3, if a consolidation was made on that day? Assume that any difference between the fair value of the consideration paid for Bo's shares, and the fair value of the net assets, is due to the directors of Des Ltd having overestimated the fair value of Bo's assets. The over-estimation was not discovered until October 20X3.
Select one:
On 1 July 20X3 Des Ltd will record a goodwill asset of $200,000 in its ledger.
The group will record a goodwill asset of $100,000 on its consolidation worksheet if prepared as at 1 July 20X3.
The group will record an acquisition expense of $200,000 on its consolidation worksheet if prepared as at 1 July 20X3.
The group will record a goodwill asset of $200,000 on its consolidation worksheet if prepared as at 1 July 20X3.
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