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483 Venus acquired 75% of Mercury’s 100,000 $1 equity shares on 1 November 20X4. The consideration comprised $2 cash per share plus one share in Venus for every share acquired in Mercury.
Shares in Venus have a nominal value of $1 and a fair value of $1.75. The fair value of the
non?controlling interest was $82,000 and the fair value of the net assets acquired was $215,500. What should be recorded as goodwill on acquisition of Mercury in the consolidated Mercury Group financial statements?Answer: 147,750
Hi, I found this question in the Kaplan exam kit, but I’m confused as to why the share capital of $100000 isn’t included in the Net assets of Mercury at the date of acquisition.
The fair value of the net assets effectively already includes the share capital. (Always in financial accounts net assets equals share capital + reserves).
Have you watched my free lectures on this?
Oh, okay, I see, thank you for clarifying that. I haven’t watched them yet, if I’m not wrong, they’re available on YouTube, right?
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