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Determine the goodwill arising on the acquisition of organ

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Reference no: EM132905470

Piccolo Ltd acquired 20% of Organ Ltd on 1 July 2013 for $234,000.

At the date of acquisition the equity of Organ is:

Share Capital: $66,000
Retained earnings: $79,000

OTHER INFO:

  1. At DOA, machinery in Organ's books was recorded at $110,000 below its fair value ($160,000), and inventory was recorded at $52,000 below its fair value ($70,000).
  2. The machinery can be used for two years and then scrapped. The inventory in Organ had been sold by Organ by June 2014.
  3. Dividends declared at 30 June are paid within 3 months.
  4. In Jan 2016, Organ Ltd revalued furniture upwards by $6,000, affect revaluation surplus by $4,200.

Problem 1: Determine the goodwill arising on the acquisition of Organ.

Reference no: EM132905470

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