A 50% Joint Venturer Acquires a Further 10% Interest in a Jointly

Multiple Choice

A 50% joint venturer acquires a further 10% interest in a jointly controlled operation,paying $2 000 000 to the jointly controlled operation whose assets including cash $1 000 000 have a fair value of $4 000 000.The acquisition will have the following effect on the venturer's cash position:

A) reduced by $2 000 000.
B) reduced by $700 000.
C) reduced by $1 000 000.
D) none of the above.