investiment in associate practice questions

Question 4 needs a small tweak, sorry. It's already on my list of amendments to make at the same time that I'm typing out the workings. The correct answer is shown as $1,029,927. This needs to be amended to $1,031,127. Cost of investment: Shares 300,000 @ $2.50 = $750,000 Deferred payment $330,000 x 1 / 1.1 x 1 / 1.1 = $272,727 Profit share 30% x 4 / 12 x $84,000 = $8,400 Total $1,031,127 Question 5 Shares 50,000 @ $1.50 = $75,000 Deferred payment $377,914 x 1/1.08 x 1/1.08 x 1/1.08 = $300,000 Profit share 4/12 x $84,000 x 35% = $9,800 Pup 35% x 4,000 = $(1,400) Total $383,400 OK?

thanks i did not understand the 35% pup deductionin question 5

But you're ok now?

I will revisit the notes, thanks. In the mini excercises, Goodwill Petras and Signe, there are 4m shares in issue, how do i figure out how much they are worth?

The general rule is that the default value is $1 per share unless otherwise indicated OK?

ok thanks, i did not know that.

No problem - but the examiner will normally be very clear about this point

thanks

You're welcome