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Calculation of Goodwill in Complex groups

NNirbhay11y ago
Question Below are the statements of financial position of three companies as at 31 December 20X9. _________________________Bauble _____Jewel ______Gem Non-current assets Property, plant and equipment ___720 _______60 __________70 Investments in group companies __185 _______100 _________ 0 __________________________ _905 ________60 __________ 70 Current assets________________ 175__________95___________90 _________________________ 1,080_________255 __________160 Equity Share capital – $1 ordinary shares 400 100 50 Retained earnings 560 90 65 960 190 115 Current liabilities 120 65 45 1,080 255 160 You are also given the following information: (a) Bauble Co acquired 60% of the share capital of Jewel Co on 1 January 20X2 and 10% of Gem on 1 January 20X3. The cost of the combinations were $142,000 and $43,000 respectively. Jewel Co acquired 70% of the share capital of Gem Co on 1 January 20X3. Answer Goodwill ___________________________Jewel _____________Gem $'000 $'000 $'000 $'000 Consideration transferred: Bauble 142 _____________43.0 Consideration transferred: Jewel _______(100 × 60%) 60.0 NCI _______________(145 × 40%) 58 ____ (90 × 48%) 43.2 Net assets at acq'n as represented by: Share capital ________________100 _____________50 Ret'd earnings _______________45 _____________ 40 _________________________ (145) ___________ (90.0) Goodwill 55 56.2 Total goodwill = $111,200 Where do we get the 100 in purchase consideration transferred from for Gem?
HHammad11y ago#1
It's our share of what Jewel has paid for Gem.
MikeLittleMikeLittleTutor11y ago#2
Look at the SofFPs and you'll see in the Jewel column the figure of $100 listed at "investment in group companies" Ok?
NNirbhay11y ago#3
Thank You Mike!!
MikeLittleMikeLittleTutor11y ago#4
You're welcome
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