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Hello… please help me to solve the below question from Kaplan Book…. as far as i know when calculating NA of Subsidiary – for Share capital we must use the figure provided in the SOFP and it should be unchanged @ both the date of acquisition and reporting date.
Question : At the 1 January 20×2 Y acquired 75% of the S.capital of Z for $400, 000. At that date the S.Capital of Z consisted of 600,000 ordinary shares of 50c each and its reserves were $50,000.
The fair value of NCI at the date of acquisition was $100,000.
In the consolidated statement of financial position of Y and its subsidiary Z at 31 december 20X6, what amount should appear for goodwill?
A $150, 000
B $137, 500
C $55, 000
D $110, 000Correct Ans provided in the book: A
Consideration + fair value of NCI = 400000 + 100000 = 500000
Share capital + pre acq reserves = (600000 x 0.50) + 50000 = 350000
Goodwill = 500000 – 350000 = 150000
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