On July 1 20X3,Heroic Ltd Acquired a 30% Interest in Manfred

Multiple Choice

On July 1 20X3,Heroic Ltd acquired a 30% interest in Manfred Ltd,and the power to exert significant influence over that company,for a cash consideration of $2,000,000.At the date of acquisition,the net assets of Manfred Ltd approximated fair value.At respective dates,the shareholders' equity of Manfred Ltd was as follows (amounts in thousands) : Other information
I.Heroic Ltd was not a parent entity
II.At June 30 20X7,Heroic Ltd had held inventories which had been supplied by Manfred Ltd at a mark-up of $50,000.The income tax rate was 30%.
III.Due to worsening operating difficulties in Manfred Ltd,at June 30 20X8,the recoverable amount of the investment was estimated to be $1,200,000.
In the balance sheet of Heroic Ltd as at June 30 20X8,the carrying amount of the investment in Manfred Ltd would be:

A) $1,700,000
B) $1,200,000
C) $1,215,000
D) None of the above.