On 1 January 2011, Berardo Ltd acquired 25% of the ordinary issued share capital of Ricky Ltd for $750 000. This investment gave rise to significant influence. The share capital and reserves of Ricky Ltd at 1 January 2011 were: Share capital 800,000 General reserve 500,000 Retained earnings 550,000 Total 1,850,000 All the identifiable net assets of Ricky Ltd were stated at fair value at the date of acquisition except for a building whose carrying value was $100 000 less than the fair value. Implicit goodwill arising on Berardo's acquisition of Ricky was: A) $262,500 B) $270,000 C) $287,500 D) $300,000
On 1 January 2011, Berardo Ltd acquired 25% of the ordinary issued share capital of Ricky Ltd for $750 000. This investment gave rise to significant influence. The share capital and reserves of Ricky Ltd at 1 January 2011 were: Share capital 800,000 General reserve 500,000 Retained earnings 550,000 Total 1,850,000 All the identifiable net assets of Ricky Ltd were stated at fair value at the date of acquisition except for a building whose carrying value was $100 000 less than the fair value. Implicit goodwill arising on Berardo's acquisition of Ricky was: A) $262,500 B) $270,000 C) $287,500 D) $300,000
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 1BCRQ
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On 1 January 2011, Berardo Ltd acquired 25% of the ordinary issued share capital of Ricky Ltd for $750 000. This investment gave rise to significant influence.
The share capital and reserves of Ricky Ltd at 1 January 2011 were:
| Share capital | 800,000 |
| General reserve | 500,000 |
| 550,000 | |
| Total | 1,850,000 |
All the identifiable net assets of Ricky Ltd were stated at fair value at the date of acquisition except for a building whose carrying value was $100 000 less than the fair value. Implicit
A) $262,500
B) $270,000
C) $287,500
D) $300,000
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