Xana Limited paid $110 000 for 60% of Yama Limited.At the date of acquisition Yama Limited had share capital of $100 000 and retained earnings of $50 000 and all of Yama Limited's assets and liabilities were recorded at fair value.The fair value of identifiable net assets acquired by Xana Limited amounted to:

Question

Quizplus · Accepted Answer

To find the fair value of identifiable net assets acquired by Xana Limited, we need to first calculate the net assets of Yama Limited at the date of acquisition. The net assets of Yama Limited can be calculated as follows:

Net Assets = Share Capital + Retained Earnings
Net Assets = $100,000 + $50,000
Net Assets = $150,000

Since Xana Limited acquired 60% of Yama Limited, they only acquired 60% of the net assets, which is:

Fair Value of Identifiable Net Assets = 60% x $150,000
Fair Value of Identifiable Net Assets = $90,000

Therefore, the correct choice is B.

Xana Limited Paid $110 000 for 60% of Yama Limited