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X co acquired 75% of Y Co’s 100,000 $1 ordinary share capital on 1Nov 2011. The consideration consisted of $2 cash per share and 1share in X Co for every 1 share acquired in Y Co.
X Co. shares 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 net assets acquired was $215,500.
Answer: $147,750.
Sir i need to know the net asset of subsidiary Y and the investment of X pls??The net assets of Y are $215,500
The consideration paid by X is (75% x 100,000) 75,000 x ($2 + $1.75) = 281,250
Therefore the goodwill is (281,250 + 82,000) – 215,500 = 147,750
Thank you sir.
I have another qustion:(Debt Ratio)
tangible non-current asset $133750
intangible asset $15800
inventory $27400
recivables $17430
Cash$3200
bank overdraft $1500
trade payables $34340
long-debt $50000
provision$5700
The debt ratio answer is 46.3%.
What will be the equity? the provision account is it current or non-current libility?In future, please start a new thread if you are asking a question on a different topic.
A provision can be current or non-current – it depends on what it relates to.
I don’t know where you found this question, but it could not possibly be asked in this way in the exam. (Also ‘debt ratio’ is not a standard term and would not be used in the exam without it being defined)
The equity is equal to the total assets less the total liabilities.
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