Calculate Goodwill on Acquisition Date

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Reference no: EM132941259

Question - A Ltd acquired 70% of the shares of James Ltd on 1st July 2016 for $540,000. The B Ltd equity consisted of the following items at acquisition date

Share Capital: $500,000

General Reserve: 80,000

Retained Earnings: 50,000

Asset revaluation reserve: 20,000

All identifiable assets and liabilities of James Ltd are recorded at fair value at this date except for inventory for which the fair value was $10,000 greater than carrying amount and plant which had a carrying amount of $150,000 (Accumulated depreciation net of $40,000) and a fair value was $170,000. The plant has a further 5 years life.

Requirement - Calculate Goodwill on Acquisition Date for A Ltd, B Ltd and 30% Non-controlling Interest.

Reference no: EM132941259

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