Dear Sir/Madam,
I cannot understand the workings laid out in the solution to the following activity. How did they arrive to the $660 part of the workings for net assets and $200 for NCI?
Pelmer Co acquired 80% of Symta Co's 100,000 $1 shares on 1 Jan 20X2 for $600,000 when the reserves of Symta were $410,000. Symta had a brand name valued at $50,000 which was recognised on acquisition. The FV of the NCI at acquisition was $150,000. On 01 Jun 20X6 Pelmer disposed of its shareholding for $1,500,000. At that date, Symta's reserves were $710,000 and it had net assets with a carrying amount of $650,000. The value of the brand name has not changed since acquisition.
Solution:
Consideration transferred 1,500,000
Less
share of consolidated
amount at date control lost:
Net assets (100+660+50) 810
Goodwill 190
NIC at date control lost 200
Gain 700
