Reference no: EM132756376

In 20x2, C Ltd paid $260,000 to acquire 80% of the shares of D Ltd when the fair value of D Ltd's net assets was represented by share capital of $100,000 (comprising 100,000 ordinary shares) and retained profit of $200,000.

• In 20x4, C Ltd paid $55,000 to acquire an additional 10% of the shares of D Ltd when the fair value of D Ltd's net assets was represented by share capital of $100,000 (comprising 100,000 ordinary shares) and retained profit of $350,000.
• As at 31 December 20x6, the retained profits of C Ltd and D Ltd were $500,000 and $600,000 respectively.
• Assume that a direct shareholding of more than 50% gives rise to control and a direct shareholding of 20% or more but less than 50% gives rise to significant influence.

Required:

Problem 1: Compute the following line items in C Ltd's consolidated statement of financial position as at 31 December 20x6:

(a) Goodwill
(b) Capital reserve (and indicate whether it is a debit balance or credit balance)
(c) Non-controlling interest
(d) Retained profit