Black Ltd acquired 75 % of White Ltd on 1 January 20X1 by paying $5 000 000 cash.At that date, the equity section of White Ltd's balance sheet was as follows:
$\begin{array}{llcc}
&\$\
\text {Share capital } &1000000 \
\text { Retained profits} &3000000\
\text { Asset revaluation reserve } &500000\

\end{array}$

All assets and liabilities were recorded at their fair values.During May 20X1 White Ltd paid a total dividend of $1 000 000 out of profits earned before 1 January 20X1.AASB 127.38A was operational during this period.
What would be the balance of the account 'Investment in White Ltd' at 30 June 20X1?

Question

Black Ltd acquired 75 % of White Ltd on 1 January 20X1 by paying $5 000 000 cash.At that date, the equity section of White Ltd's balance sheet was as follows:
$\begin{array}{llcc}
&\$\
  \text {Share capital  } &1000000  \
 \text {  Retained profits} &3000000\
 \text { Asset revaluation reserve } &500000\

\end{array}$

All assets and liabilities were recorded at their fair values.During May 20X1 White Ltd paid a total dividend of $1 000 000 out of profits earned before 1 January 20X1.AASB 127.38A was operational during this period.
What would be the balance of the account 'Investment in White Ltd' at 30 June 20X1?

Quizplus · Accepted Answer

The Answer of Black Ltd acquired 75 % of White Ltd on 1 January 20X1 by paying $5 000 000 cash.At that date, the equity section of White Ltd's balance sheet was as follows:
$\begin{array}{llcc}
&\$\
  \text {Share capital  } &1000000  \
 \text {  Retained profits} &3000000\
 \text { Asset revaluation reserve } &500000\

\end{array}$

All assets and liabilities were recorded at their fair values.During May 20X1 White Ltd paid a total dividend of $1 000 000 out of profits earned before 1 January 20X1.AASB 127.38A was operational during this period.
What would be the balance of the account 'Investment in White Ltd' at 30 June 20X1?

Black Ltd Acquired 75 % of White Ltd on 1