Reference no: EM132982824

Fiona Ltd obtained control of Belinda Ltd on 1 January 20X2. The following items may require attention for group data adjustments:

• Belinda had shipped $50 000 of inventory to Fiona. As at control date, Fiona had not received or recognised this shipment.
• Fiona had made a $10 000 payment to Belinda for interest payment on an inter-company loan, but as of 1 January 20X2 Belinda had not received the payment.
• Belinda has an intangible copyright asset which is not recognised by Belinda but has a fair value of $80 000.The question refers to the consolidation worksheet prepared at control date.

Problem 1: With regard to the copyright asset, the correct consolidation data adjustment entry is:

Select one:

a. None of the given answers is correct
b. No entry required
c. Dr Copyright $80 000; Cr Asset revaluation reserve $80 000
d. Dr Copyright $80 000; Cr Fair value reserve $80 000