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Hi Mike,
I am really struggling when it comes to good will and shares.
I am looking at the mini questions page 200 – 1B
Can you tell me how the answer has valued the nci at 384000?
Do you know of any other documents /questions i can also look at to help with this as i am really not confident.
Thank you
Elise
Elise It’s simple!
Actually in the second situation we are given the share price of S’s share i.e. $1.60.
H is holding 70% of S
NCI’s share is automatically 30%
Take the share capital’s NCI’s portion multiply that by the share price of S.
Here you go! 🙂Elise, on this occasion Ema is correct. That, sadly, is not always the case.
Re your question, where H acquires 70% of the 800,000 shares, that means that the number of shares NOT acquired must be 30% of 800,000 = 240,000 shares
And we’re told that the value of the S shares immediately before acquisition was $1.60
Therefore, the nci value must be $1.60 x 240,000 shares = $384,000
OK
If you have any further queries, please do continue to post on this page, coincidentally called Ask the Tutor, and I’ll try to get back to you rather quicker that the 12 hours 22 minutes this reply has taken
Ema, we seem to have settled into a pretty established routine on this site. As you know, when you have a question and need my help, you post your question on this page and I get back to you as soon as I am able
In the same way, therefore, can you accept that if I have a question and I need your help, I shall post my question on this page and hope that you will get back to me as soon as you are able?
Point taken?
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