On 1 July 20X3 Alpha Ltd acquired a 25% share of Beta Ltd. At that date the following assets had carrying amounts different to their fair values in Beta's books:

All inventories were sold to third parties by 30 June 20X4. On 1 July 20X3, the machinery had a remaining useful life of 3 years.
The tax rate is 30%.
The adjustment required to the Investment in Associate account at 30 June 20X4 in relation to the above assets is:

Question

On 1 July 20X3 Alpha Ltd acquired a 25% share of Beta Ltd. At that date the following assets had carrying amounts different to their fair values in Beta's books:

All inventories were sold to third parties by 30 June 20X4. On 1 July 20X3, the machinery had a remaining useful life of 3 years.
The tax rate is 30%.
The adjustment required to the Investment in Associate account at 30 June 20X4 in relation to the above assets is:

Quizplus · Accepted Answer

The Answer is A

On 1 July 20X3 Alpha Ltd Acquired a 25% Share