Question
Which of the following are situations where the subsidiary share price may not reliably be used to estimate the control date fair value of NCI?
Which of the following are situations where the subsidiary share price may not reliably be used to estimate the control date fair value of NCI?
Select one:
a. Neither the parent nor the subsidiary share price is quoted on an active or open securities market at control date.
b. The subsidiarys share price is not quoted on an active or open securities market at control date.
c. All the described situations may give an unreliable estimate.
d. Cash is not used as the method of consideration.
2. Honky Ltd acquired all the issued share capital of Cat Ltd on 1 July 20X0. Goodwill acquired was $1,000,000 and Honky Ltd tests this goodwill for impairment every year. As at July 1 20X5 $500,000 of the original goodwill had been recorded as impaired. For the year ended June 30 20X6 a further $100,000 was regarded as being impaired. What is the elimination journal entry accounting for the impairment of this goodwill in Honky Group consolidated financial statements for the year ended 30 June 20X6?
Select one:
A.
Accounts | Debit $ | Credit $ |
Goodwill impairment expense | 100,000 | |
Retained profits | 100,000 |
--B.
Accounts | Debit $ | Credit $ |
Goodwill impairment expense | 100,000 | |
Retained profits | 500,000 | |
Accumulated goodwill impairment | 600,000 |
--C.
Accounts | Debit $ | Credit $ |
Goodwill impairment expense | 100,000 | |
Retained profits | 600,000 | |
Accumulated goodwill impairment | 700,000 |
--D.
Accounts | Debit $ | Credit $ |
Goodwill amortisation expense | 100,000 | |
Goodwill | 100,000 |
--
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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