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What is the amount of goodwill

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Question 1 - Smith Ltd acquired all the shares of Jon Ltd for $1,470,000. The book value of Jon Ltd's net assets at the time of acquisition is $1,000,000. All assets are at fair value except for land and buildings which exceeded their book value by $100,000. What is the amount of Goodwill, if any, that Smith Ltd will record on acquisition of Jon Ltd?

a. $400,000.

b. $300,000

c. $370,000.

d. $380,000

Question 2 - James Ltd acquired all the shares of Brianna Ltd for $655,000. Brianna Ltd's Statement of Financial Position at the date of acquisition shows total assets of $700,000 and liabilities of $300,000. The market value of Brianna Ltd's assets is $800,000. What is the amount of goodwill that James Ltd will recognise on acquisition?

a. $255,000

b. $155,000.

c. $220,000.

d. $120,000.

Reference no: EM132715849

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