MENU
LM acquired 80% of the equity shares of ST when ST's retained earnings were $50 million. The fair value of the net assets of ST included a contingent liability with a fair value of $100 million at the date of acquisition and a fair value of $40 million at 31 December 20X6. No other fair value adjustments were required at the date of acquisition.
LM and ST had retained earnings of $200 million and $80 million respectively at 31 December 20X6.
The consolidated retained earnings of LM at 31 December 20X6 were:
Suggested Answer: C
Get Premium CIMAPRA19-F02-1 Questions
as Interactive Web-Based Practice Test or PDF
Real Exam Format
Detailed Explanations
Instant Access
Get Your Practice Test
8 comments · newest first
LA
Laurel
12 months ago
Totally with you on that, Kendra!
LA
Laquita
1 year ago
Wait, how does the contingent liability affect this?
KE
Kendra
1 year ago
So, is it $176 million? Sounds right.
ON
Onita
1 year ago
Don't forget the 80% ownership!
BE
Bernardine
1 year ago
LM's retained earnings are $200 million, ST's are $80 million.
EL
Elise
1 year ago
I've worked with Nuage VSP before, so I'm pretty confident that's one of the right answers. The other two are a bit trickier to remember.
KA
Katy
1 year ago
I feel like option B is more about corporate ethics rather than sustainability, but it's tricky. A sounds correct to me for this question.
JA
Jamey
1 year ago
This looks like a straightforward activity-based budgeting question. I'll need to calculate the machine set-up cost per unit of product Q based on the given information.