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Compute the goodwill on consolidation

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Reference no: EM132532259

Question 1: Determine the goodwill on consolidation that will appear in the consolidated statement of financial position of the Remington Company, as at 31 December 2015 assuming the following information:

On 31 December 2015, the Remington Company purchased 75 per cent of the equity share of the Steele Company for $16 000. Steele's statement of financial position showed net assets of $14 000 before taking account of the following items:

  1. The market value of Steele's properties at 31 December 2015 was $10 000 and was included in the statement of financial position at a carrying value of $9000.
  2. As at 31 December 2015, Steele was in the process of negotiating an unsettled court case. If lost, Steele would be required to pay $10 000, however, the directors of Steele are confident that the claim will be successful.

Reference no: EM132532259

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