A Ltd pays $80,000 to acquire 80% of the shares of B Ltd on 1 January...

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A Ltd pays $80,000 to acquire 80% of the shares of B Ltd on 1 January 20x4 when B Ltd was incorporated with share capital of $100,000 (comprising 100,000 ordinary shares at $1 each). On 1 January 20x8, when the fair value of B Ltd's identifiable net assets was represented by share capital of $100,000 and retained profit of $50,000 and B Ltd's shares are traded at $3 per share, A Ltd sells 40% of the shares (and retains 40% of the shares) of B Ltd for cash consideration of $120,000. The "Profit on sale of subsidiary" to be reported in A Ltd's consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 20x8 should be: None of the listed choices. O $120,000. O $40,000. $80,000. $60,000. A Ltd pays $80,000 to acquire 80% of the shares of B Ltd on 1 January 20x4 when B Ltd was incorporated with share capital of $100,000 (comprising 100,000 ordinary shares at $1 each). On 1 January 20x8, when the fair value of B Ltd's identifiable net assets was represented by share capital of $100,000 and retained profit of $50,000 and B Ltd's shares are traded at $3 per share, A Ltd sells 40% of the shares (and retains 40% of the shares) of B Ltd for cash consideration of $120,000. The "Profit on sale of subsidiary" to be reported in A Ltd's consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 20x8 should be: None of the listed choices. O $120,000. O $40,000. $80,000. $60,000.

Answer rating: 100% (QA)

The Profit on sale of subsidiary to be reported in A Ltds consolidat... View the full answer