Carnation Ltd Purchased a 25% Shareholding in Bloom Ltd on 1

Carnation Ltd purchased a 25% shareholding in Bloom Ltd on 1 January 2021 for $90 000. Bloom Ltd's assets were recorded at fair values and its owners' equity, totalling $350 000, was represented as follows:
Share capital $100 000
General reserve $60 000
Asset revaluation surplus $50 000
Retained profits $140 000
During July 2021, Bloom Ltd paid an interim dividend of $15 000. At 31 December 2021, Bloom Ltd reported:
Profit after tax for 2021 $64 000
Final dividend payable $30 000
A transfer to the general reserve $20 000
Increase of the asset revaluation surplus to $80 000
The equity carrying amount of the investment in Bloom Ltd at 31 December 2021 is:

A) $106 000
B) $109 750
C) $102 250
D) $113 500

Correct Answer:

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