Betty sold 10% for 4million.
Could you explain how the journal entry is Dr. Bank 9million?
also Goodwill is based on original 90% holding? the original was 70%.
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SBR Opentuition note Chapter6 example 3
7y ago#1Hi,
The entry to bank is for $90 million, being the amount of cash received on sale of the shares.
No, we originally bought 90% which is when we would have calculated the goodwill. We then dispose of 20% to take us to a 70% holding, but there is no adjustment to goodwill as this is calculated initially when we gained control. The only potential adjustment to goodwill could be through an impairment.
Thanks
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