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Question 1
H acquired 60% of the 500,000 $1 shares in S for $470,000. At that date the S retained earnings were $200,000. Goodwill has been impaired
by 40%.
c) the directors valued the goodwill attributable to the nci at $15,000
->
Cost of Inv. 470,000
Value of Nci Inv. {(40% x 700,000) + 10,000} 295,000FV of SNA @ DOA 700,000
G/W 65,000
Imp 40% 26000
G/W aftr imp. 39000this is the way i hve done; in mini exercise answer, it has been done in another way. i am bit confused.
“Value of Nci Inv. {(40% x 700,000) + 10,000} 295,000” – your “10,000” in the brackets should of course be 15,000
As for a different way …. it looks like I have made a mistake! $0% x 700 is 280 and 280 + 15 is 295, not 305
I appear to have added two simple figures and made a dog’s dinner of it!
Thanks for pointing this out
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