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River Ltd Pays $5,500,000 for a 70% Share in Stream

Question 47

Multiple Choice

River Ltd pays $5,500,000 for a 70% share in Stream Ltd. The net assets acquired in Stream Ltd are valued at $5,000,000. The $500,000 difference will appear in River Ltd's statement of financial position as:


A) goodwill on consolidation.
B) mortgage payable.
C) long-term investment.
D) acquisition reserve.

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