Reference no: EM132379469

Question

Parent Ltd acquired Subsidiary Ltd and the purchase consideration consisted of:

Cash: $100 000

Shares in Parent Ltd: 50 000 shares with a market value of $1.60 per share

Land: carrying value of $90 000 and fair value of $100 000

Parent Ltd incurred legal fees of $6 000 to complete the acquisition.

At the date of acquisition, Subsidiary Ltd had the following assets and liabilities:

                 Carrying Amount $           Recoverable Amount $               Fair Value $

Assets

Land                   100 000             150 000                        200 000

Machinery           50 000             80 000                    85 000

Cash                20 000

Liabilities

Loan             105 000

Required

What is the amount (if any) of the goodwill on acquisition of the Subsidiary Ltd?