Question: David Ltd purchases a 100 per cent interest in Roger Ltd. The cost of the acquisition is $1 500 000 plus associated legal costs of

David Ltd purchases a 100 per cent interest in Roger Ltd. The cost of the acquisition is $1 500 000 plus associated legal costs of $80 000. As at the date of acquisition, the statement of financial position of Roger Ltd shows net assets $5,000,000.

Determine, for accounting purposes, the amount of goodwill that has been acquired by Roger Ltd.

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