On 1 January 2012,Cowboys Ltd acquired all the issued shares in Tate Ltd.At that date,the inventory of Tate Ltd had a fair value of $10 000 more than its carrying amount.By 30 June 2013,75% of the inventory was sold to an entity outside of the group.The business combination valuation consolidation adjustment against inventory in relation to the transaction as at 30 June 2013 will be:

Question

Quizplus · Accepted Answer

The adjustment is for the unsold inventory, which is 25% of the original $10,000 fair value adjustment, resulting in a debit of $2,500.

On 1 January 2012,Cowboys Ltd Acquired All the Issued Shares