Hi Sir. I have a question.
This is a question from BPP.

On 1 January 20×8, Lentil Co acquired all of Chickpea Co’s 100,000 $1 shares for
$400,000. The goodwill acquired in the business combination was $60,000, of which 40% had been written off as impaired by 31 December 20X8. On 31 December 20X5 Lentil Co sold all of Chickpea Co’s shares for $680,000 when Chickpea Co had retained earnings of $215,000.

My solution is
Proceed 680,000
Non control interest 0
Net asset at disposal (100,000+215,000)
Goodwill (36,000)
= 329,000

But the answer in BPP is 280,000(680,000-400,000)

Could you please help me?
Thank you!!

Comments

Mainash1224 says
July 12, 2024 at 4:39 am
Hi Sir. I have a question.
This is a question from BPP.
On 1 January 20×8, Lentil Co acquired all of Chickpea Co’s 100,000 $1 shares for
$400,000. The goodwill acquired in the business combination was $60,000, of which 40% had been written off as impaired by 31 December 20X8. On 31 December 20X5 Lentil Co sold all of Chickpea Co’s shares for $680,000 when Chickpea Co had retained earnings of $215,000.
My solution is
Proceed 680,000
Non control interest 0
Net asset at disposal (100,000+215,000)
Goodwill (36,000)
= 329,000
But the answer in BPP is 280,000(680,000-400,000)
Could you please help me?
Thank you!!
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khorasiaasif@gmail.com says
July 20, 2023 at 12:11 pm
Thank you.
Just for understanding, we have added NCI share before deducting 100% sale proceeds from N.A and Goodwill to arrive at Group Profit or Loss. Doesnt this profit or loss further get distributed between Group and NCI?
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