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Calculate the amount of the consideration paid by investor

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Reference no: EM132727005

On 1 July 2027, Investor Ltd (Investor) acquired all of the ordinary shares in Investee Ltd (Investee) by paying cash. At that date, the equity of Investee was as follows.

$
Issued capital (100 000 shares issued) 100 000
Retained earnings 80 000
Total equity 180 000
Acquisition-related costs totalled $2000

  • On acquisition, Investor revalued the assets of Investee to fair value, resulting in a revaluation increment of $20 000. The revaluation led to the recognition of a deferred tax liability of $6000. The amount of goodwill included in the consolidated statement of financial position was $10 000.

Required

Problem 1: Calculate the amount of the consideration paid by Investor for the shares in Investee. Show workings and calculations.

Reference no: EM132727005

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