Fish Ltd Acquired an 80 Per Cent Interest in Chips

Multiple Choice

Fish Ltd acquired an 80 per cent interest in Chips Ltd on 1 July 2003 for a cash consideration of $838,000. At that date the fair value of the net assets of Chips Ltd was represented by:

On 30 June 2005 Fish Ltd sold all its shares in Chips Ltd for $950,000. At this date the fair value of the net assets of Chips Ltd was represented by:

The retained earnings of $490,000 includes operating profit after tax of $90,000 from the current period. Impairment of goodwill was assessed at $6,000, the impairment having been incurred evenly across the last two years. The investment has not been marked to market during the period that the shares were held. What is the elimination entry required for the consolidated accounts?

A)
B)
C)
D)
E) None of the given answers.