Problem: On 1 July 2016 Titans Ltd acquired a 25% share of Taylor Ltd. At that date, the following assets had carrying amounts different to their fair values in Taylor's books.
|
Asset
|
Carrying amount
|
Fair value
|
|
Inventory
|
$24,000
|
$30,000
|
|
Machinery
|
$48,000
|
$60,000
|
All inventory was sold to third parties by 30 June 2017. On 1 July 2016, the machinery had a remaining useful life of 3 years.
The tax rate is 30%.
Compute the adjustment required to the investment in associate account at 30 June 2018 in relation to the above assets?
a. $1000.
b. $2450.
c. $2800.
d. $3500.