[Almond5]

Yes sir got it,
Thanks.

May I ask one more please

At 1 October 20X7, Mcllroy Co had an 80% holding in Spieth Co and a 65% holding in Clarke Co.

On 30 September 20X8, Mcllroy sold all of its 65,000 $1 shares in Clarke Co for $582,000. No accounting entries have been made to record the disposal, other than to record the disposal proceeds in a suspense account. The disposal is the final part of a plan by Mcllroy Co to dispose of Clarke Co’s operations because it operates in separate business sector to the other companies in the group. Clarke Co’s retained earnings at 1 October 20X7 were $286,000. Mcllroy Co measures all non-controlling interests using the proportionate method.

The draft individual statements of profit or loss of the three companies are shown below:

Adjustment
2) Mcllroy Co acquired its holding in Clarke Co several years ago for $268,000 when Clarke Co’s retained earnings were $174,200. The fair values of Clarke Co’s net assets at the date of acquisition were the same as their carrying amounts. The goodwill in Clarke Co was impaired by $25,000 in the year ended 30 September 20X7. No further impairment of the goodwill in Clarke Co is required in the current year.

Answer:

Consideration transferred = 268000
NCI @ acquisition(274200*35%) = 95970
Less net asset at acquisition =(274200)
(100000+174200)
Goodwill =89770
Less impairment loss =(25000)
Goodwill at disposal = 64770

How do we get 100k in net asset at acquisition?

[Almond5]

Sorry sir small mistake in posting question.
That mistake is 6000*3.791 (annuity factory 5yrs @10%)=22,746
Why not use this amount?
Why they used 23000 in calculating lease liability?

[Author]

Posts