Broncos Limited acquired a 30% interest in Bennett Limited for $54 000. Broncos holds other equity investments but does not prepare consolidated financial statements. Bennett Limited revalued its buildings upwards by $20 000 during the current financial period. The balance of the investment in associate account at the end of the current financial period is:

Question

Quizplus · Accepted Answer

Since Broncos Limited holds a 30% interest in Bennett Limited, it would recognize 30% of Bennett Limited's $20,000 revaluation increase in its investment account. This results in an increase of $6,000 ($20,000 * 30%) to the initial investment of $54,000, totaling $60,000.

Broncos Limited Acquired a 30% Interest in Bennett Limited for $54