ZuoTi.Pro
Question

Z Ltd purchased 60 000 shares of B Ltd for $96 500. B Ltd had a...

Z Ltd purchased 60 000 shares of B Ltd for $96 500. B Ltd had a total of 75 000 shares. Z Ltd measures the non-controlling interest as a proportion of fair value of net assets of B Ltd. What is the goodwill that will appear in the consolidated financial statements of Z Ltd given that the fair value of net assets of B Ltd was $91 245 at the date of acquisition? A) $10 500 B) $27 600 C) $29 380 D) none of the above

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Goodwill = Investment Cost by Z + Non Controlling Interest - Fair Value of Net Assets

= 96,500 + 18,249(See below Calculation) - 91,245

= $23,504

===Please note Z Ltd measures the non-controlling interest as a proportion of fair value of net assets of B Ltd.

Investment Cost (80%) $96,500

Non Controlling Interest Calculation (NCI)

91,245*20% = $18,249

Hence answer is (D) None of the above

0 0
Add a comment
Know the answer?
Add Answer to:
Z Ltd purchased 60 000 shares of B Ltd for $96 500. B Ltd had a...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A Ltd acquired all of the issued shares of B Ltd. When preparing the consolidated financial...

    A Ltd acquired all of the issued shares of B Ltd. When preparing the consolidated financial statements, goodwill in relation to the acquisition will be recognised when: a. the cost of the acquisition is equal to the fair value of the subsidiary’s identifiable net assets b. the cost of the acquisition is more than the carrying amount of the subsidiary’s identifiable net assets only to the extent attributable to the non-controlling interest c. the cost of the acquisition of the...

  • Z Ltd owns 60 000 shares of E Ltd. E Ltd had a total of 100...

    Z Ltd owns 60 000 shares of E Ltd. E Ltd had a total of 100 000 shares. During the period, E Ltd (which is a subsidiary of Z Ltd) has sold goods to Z Ltd at a mark-up of 20% on its costing $1 000. On the reporting date, these goods remain unsold with Z Ltd. What is the effect related to adjusting non-controlling interest (NCI) at the time of consolidation? NCI to be: A) Reduced by $120 B)...

  • Z Ltd owns 60 000 shares of E Ltd. E Ltd had a total of 100...

    Z Ltd owns 60 000 shares of E Ltd. E Ltd had a total of 100 000 shares. During the period, E Ltd (which is a subsidiary of Z Ltd) has sold goods to Z Ltd at a mark-up of 20% on its costing $1 000. On the reporting date, these goods remain unsold with Z Ltd. What is the effect related to adjusting non-controlling interest (NCI) at the time of consolidation? NCI to be: A) Reduced by $120 B)...

  • Exercise 29.4 Undervalued assets, full and partial goodwill method On 1 July 2022, Jane Ltd acquired...

    Exercise 29.4 Undervalued assets, full and partial goodwill method On 1 July 2022, Jane Ltd acquired 75% of the issued shares of Austen Ltd for $360 000. At this date, the equity of Austen Ltd consisted of share capital of $200 000 and retained earnings of $130 000. All the identifiable assets and liabilities of Austen Ltd were recorded at amounts equal to fair value except for the following. Austen Ltd also had an internally generated patent not recognised at...

  • A Ltd acquired all of the issued shares of B Ltd. When preparing the consolidated financial...

    A Ltd acquired all of the issued shares of B Ltd. When preparing the consolidated financial statements, fair value adjustments relate to: a. differences between fair value and carrying amount of the parent’s identifiable assets and liabilities b. differences between fair value and cost of the subsidiary’s identifiable assets and liabilities to the extent attributable to the non-controlling interest c. differences between fair value and cost of the subsidiary’s identifiable assets and liabilities to the extent attributable to the parent...

  • Parent Ltd. purchased 100% of the shares of Subsidiary Inc. for $150,000. At the date of...

    Parent Ltd. purchased 100% of the shares of Subsidiary Inc. for $150,000. At the date of acquisition, the following information is provided below: Total assets shown on balance sheet of S Inc. Total liabilities shown on balance sheet of S Inc Goodwill shown on S Inc. balance sheet included in assets above Excess of fair value over carrying amount of S Inc. land Total assets of parent including the investment in Subsidiary Inc. Total liabilities of parent $144,000 24,000 7,500...

  • Aye Ltd acquired 90% interest in Bee Ltd on 1 January 20x1, for which the purchase...

    Aye Ltd acquired 90% interest in Bee Ltd on 1 January 20x1, for which the purchase consideration was structured as follows: · Cash of $800,000. · A parcel of freehold land with carrying amount of $300,000 in the books of Aye Ltd but had a fair value of $400,000 as at 1 January 20x1. · A contingent payment of $100,000 payable in two years from the acquisition- date if Bee Ltd meets specific profit targets. On 1 January 20x1, based...

  • Question 2 Parent Ltd acquired 60% of the equity in Sub Ltd on 1 April 2014...

    Question 2 Parent Ltd acquired 60% of the equity in Sub Ltd on 1 April 2014 for $1 200 000. At that date, the equity of Sub Ltd comprised share capital of $600 000 and retained earnings of $340 000 Because Sub Ltd used the cost model for its recognised property, plant, and equipment, it had several items whose book value was lower than fair value at the date of acquisition. The book values and the fair values of these...

  • Question 6 Swamp Ltd acquired 90% of the shares (cum div.) of Tortoise Ltd on 1...

    Question 6 Swamp Ltd acquired 90% of the shares (cum div.) of Tortoise Ltd on 1 July 2017 for $474 000. At this date, the equity of Tortoise Ltd consisted of: Share capital Asset revaluation surplus Retained earnings $ 250 000 60 000 160 000 At acquisition date all the identifiable assets and liabilities of Tortoise Ltd were recorded at amounts equal to fair value. Tortoise Ltd had recorded goodwill of $10 000 and a dividend payable of $20 000,...

  • 1) On 1 July 2018 Pumba Ltd acquired 85% of the shares in Timon Ltd by...

    1) On 1 July 2018 Pumba Ltd acquired 85% of the shares in Timon Ltd by issuing 520,000 shares. At the date of acquisition the share price of Pumba Ltd was $3.20 per share and the share price of Timon Ltd was $2.40 per share. The equity of Timon Ltd at 1 July 2011 consisted of the following: Share capital                  $902,000 Retained earnings         $550,000 All identifiable net assets of Timon Ltd were recorded at fair value except for the carrying amount of...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT