Hi, plz can you help me with this question?I’m able to do everything except I seem to have a problem with calculating the fair value of NCI in the calculation of goodwill.
P acquired 75% of the shares in Son 1 January 2007 when Shad retained earnings of $15,000. The market price of S’s shares just before the date of acquisition was $1.60. P values NCI at fair value. Goodwill is not impaired.
The statement of financial position of P and S at 31 December 2007 were as follows:
P S
$ $
Property plant and equipment 60,000 50,000
Shares in S 68,000 –
128,000 50,000
Current assets 52,000 35,000
180,000 85,000
Share capital – $1 shares 100,000 50,000
Retained earnings 70,000 25,000
170,000 75,000
Current liabilities 10,000 10,000
180,000 85,000
Prepare the consolidated statement of financial position of the P group.
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FRConsolidated statement of financial position
Hi can anyone plz help with calculating NCI in getting goodwill?
Hinge Co. acquired 80% of the ordinary shares of Singe Co. on 1 April 2005. On 31 December 2004, Singe Co’s accounts shaoed a share premium account of $4,000 and retained earnings of $15,000. The statement of financial position of the two companies at 31 December 2005 are set below. Neither companies has paid any dividends during the tear. NCI should be valued at full fair value. The market price of the subsidiary’s shares was $2.50 prior to acquisition by the parent.
Hinge Co. Singe Co.
$ $
Property plant and equipment 32,000 30,000
16,000 ordinary shares of 50c each in Singe Co. 50,000
82,000
Current assets 85,000 43,000
Total assets 167,000 73,000
Equity and liabilities
Equity
Ordinary shares of $1 each 100,000
Ordinary shares of 50c each 10,000
Share premium account 7,000 4,000
Retained earnings 40,000 39,000
147,000 53,000
Current liabilities 20,000 20,000
Total equity and liabilities 167,000 73,000
Prepare the consolidated statement of financial position of Hinge Co. at 31 December 2005. There has been no impairment of goodwill.
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