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What the profit on sale of subsidiary

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Question - A Ltd pays $80,000 to acquire 80% of the shares of B Ltd on 1 January 20x4 when B Ltd was incorporated with share capital of $100,000 (comprising 100,000 ordinary shares at $1 each). On 1 January 20x8, when the fair value of B Ltd's identifiable net assets was represented by share capital of $100,000 and retained profit of $50,000 and B Ltd's shares are traded at $3 per share, A Ltd sells 40% of the shares (and retains 40% of the shares) of B Ltd for cash consideration of $120,000. What the "Profit on sale of subsidiary" to be reported in A Ltd's consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 20x8?

a. $60,000.

b. $40,000.

c. $80,000.

d. $120,000.

e. None of the listed choices.

Reference no: EM132855169

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