Question: a) What do you understand by Goodwill? (1 mark) b) Bigger n Better Pty Ltd has just acquired the Tiny Tots business. The fair value

a) What do you understand by Goodwill? (1 mark) b) Bigger n Better Pty Ltd has just acquired the Tiny Tots business. The fair value of Tiny Tots' net assets as at the date of acquisition is $1 855 000. Bigger n Better Pty Ltd has agreed to pay the owners of Tiny Tots $1 000 000 in cash and give them 100 000 shares in Bigger n Better Ltd, valued at $10 per share. Calculate the goodwill that would be recognized in Bigger n Better Pty Ltd's balance sheet immediately after the acquisition. (4 marks)

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