Use the below for questions 45-49 On 1 January 2009, Hornet plc acquired 60,000 shares out...
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Use the below for questions 45-49 On 1 January 2009, Hornet plc acquired 60,000 shares out of the 300,000 outstanding shares of Alton plc for $1 M. The fair value of net assets of Alton at this date was $8 M. Alton earned a profit of $3M for year ended 31/12/2009 and paid $1 M dividend. On 1 January 201O, Hornet acquired 120,000 additional shares in Alton for a further cash payment of $ 1.5 M. The fair value of identifiable net assets of Alton at 1 January 2010 was $ 11 M. The full goodwill method is used. The gain/loss on re-measuring the previously held 60,000 shares in Alton on 1 January 2010 is? Select one: O a. Loss $1.25 M b. Loss $0.75 M c. Gain$ 0.90 M d. None of the answers is correct O e. No gain or loss is recognized as the additional purchase is treated as a transaction between the owners. Use the below for questions 45-49 On 1 January 2009, Hornet plc acquired 60,000 shares out of the 300,000 outstanding shares of Alton plc for $1 M. The fair value of net assets of Alton at this date was $8 M. Alton earned a profit of $3M for year ended 31/12/2009 and paid $1 M dividend. On 1 January 201O, Hornet acquired 120,000 additional shares in Alton for a further cash payment of $ 1.5 M. The fair value of identifiable net assets of Alton at 1 January 2010 was $ 11 M. The full goodwill method is used. The gain/loss on re-measuring the previously held 60,000 shares in Alton on 1 January 2010 is? Select one: O a. Loss $1.25 M b. Loss $0.75 M c. Gain$ 0.90 M d. None of the answers is correct O e. No gain or loss is recognized as the additional purchase is treated as a transaction between the owners.
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E No gain or loss is recognized as the additional purchase i... View the full answer
Related Book For
Financial Accounting Tools for Business Decision Making
ISBN: 978-0470239803
5th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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