Reverse AcquisitionEntity X and Entity Y exchanged equity interests in a business combination. Relevant information follows:Entity X's  has 2,000 issued shares. To effect the business combination, Entity X will issue 2 new shares for each of the 3,000 total outstanding shares of Entity YEntity X's shares have fair value of P100 per share, while Entity Y's shares have fair value of P300 per share.Entity X's net identifiable assets have a fair value of P260,000 as at the acquisition date.Required:A. Identify the accounting acquirer.B. Compute for the Goodwill.

Revaluation of assets to fair value in a business combination will be accounted for:a) in the records of the subsidiary.b) on consolidation.c) either A or B.d) none of the above

Which of the following statements is correct?Group of answer choicesAASB 3 Business Combinations requires that any revaluations of a subsidiary’s assets at acquisition date must be done in the consolidation worksheet.The revaluation of non-current assets in the subsidiary’s records means that the subsidiary has adopted the cost model of accounting for those assets.Revaluations of assets such as goodwill and inventory are not permitted in the accounting records of the subsidiary.Inventory can be revalued to an amount greater than its cost in the records of the subsidiary.

The business combination valuation entries are used to recognise:Group of answer choicesall of the options are correct.the fair value of the liabilities not recorded in the subsidiary's accounts at acquisition date.the fair value of the assets not recorded in the subsidiary's accounts at acquisition date.the fair value adjustments for assets and liabilities that were recorded in the subsidiary's accounts at acquisition date based on carrying amounts different from fair value.

The investment elimination entry at the date of acquisition is necessary to:Group of answer choicesavoid overstating the equity and net assets of the parent.record the ‘Shares in subsidiary’ account in the parents records.avoid overstating the equity and net assets of the group.avoid understating the equity and net assets of the group.

An entity has revalued its property and has recognized the increase in the revaluation reserve in its financial statements. The carrying value of the property was GHS8 million, and the revalued amount was GHS10 million. Tax base of the property was GHS6 million. In the country, the tax rate applicable to profits is 35% and the tax rate applicable to profits made on the sale of property is 30%. Where will the tax liability be recognized and at what amount?a.In equity at GHS1.2 million.b.In statement of recognized income and expense at GHS1.4 million.c.In retained earnings at GHS700,000.d.In the income statement at GHS600,000.Clear my choice