What was the cost of acquisition

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Reference no: EM132768361

Question - Cook Ltd acquired all the issued share capital of Zac Ltd on 1 July 20X1. Zac Ltd's shareholders' equity at that date was as follows:

000s

Paid up capital $4,500

General reserve $3,000

Asset revaluation reserve $500

Retained profits $1,500

At 1 July 20X1, Cook considered Zac Ltd had unrecorded licenses with a fair value of $1,500,000. What was the cost of acquisition (the fair value of the consideration paid) incurred by Cook Ltd, if $500,000 of consolidation goodwill from the business combination was recognised in the consolidated financial statements prepared on 1 July 20X1?

a. $11,500,000

b. $10,000,000

c. $10,500,000

d. $9,000,000

Reference no: EM132768361

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