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How does the recording of goodwill by mouse ltd

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Question - Minir LTD purchased all the issued shares of Mouse LTD for RS500,000 at the time of acquisition. The balance sheet of Mouse LTD included existing goodwill of RS7,000. Mouse LTD has adopted the revaluation model AASB116 to measure its assets. Having prepared the acquisition analysis, the group accountant has asked for your advice on the following issues.

1. How does the recording of goodwill by Mouse LTD of R$7000,00 affect the accounting for the group acquired goodwill of R$5000,00

2. How does the recording of goodwill by Mouse LTD of RS7000,00 affect the accounting for the group gain on the bargain purchase of RS5000,00?

3. Explain why Mouse LTD recorded goodwill is deducted twice in preparing an acquisition analysis.

Reference no: EM133185450

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