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Hi, can you please help me with this question?I I just have a problem with calculating the consideration transferred.
Cloud obtained a 60% holding in the 100,000 $1 share s of Mist on 1 January 2008, when the retained earnings of Mist were $850,000. Consideration comprised $250,000 cash, $400,000 payable on 1 January 2009 and one share in cloud for each two shares acquired. Cloud has a cost of capital of 8% and the market value of its shares on 1 January 2008 was $2.30.
Cloud measures non controlling interest at fair value. The fair value of non controlling interest at 1 January 2008 was estimated to be $400,000.
What was the goodwill arising on acquisition?