IV. Question four (25marks) Hand acquired 70% of the equity shares in Sand in a single...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
IV. Question four (25marks) Hand acquired 70% of the equity shares in Sand in a single transaction, paying $226 million in cash. At the acquisition date the fair value of the net assets of Sand was $220 million. The fair value of the non-controlling interest at this date was $69 million. At the acquisition date, Hand had $600 million of ordinary shares in issue and reserves of $800 million, and net assets of $1,400 million, including the investment in Sand at cost. It has no other subsidiaries. Required (amount in millions) 1. Calculate goodwill under partial goodwill method (7 marks). 2. Calculate goodwill under full goodwill method (8 marks). 3. Explain the reasons why difference of goodwill lies in between partial goodwill method and full goodwill method (10 marks). IV. Question four (25marks) Hand acquired 70% of the equity shares in Sand in a single transaction, paying $226 million in cash. At the acquisition date the fair value of the net assets of Sand was $220 million. The fair value of the non-controlling interest at this date was $69 million. At the acquisition date, Hand had $600 million of ordinary shares in issue and reserves of $800 million, and net assets of $1,400 million, including the investment in Sand at cost. It has no other subsidiaries. Required (amount in millions) 1. Calculate goodwill under partial goodwill method (7 marks). 2. Calculate goodwill under full goodwill method (8 marks). 3. Explain the reasons why difference of goodwill lies in between partial goodwill method and full goodwill method (10 marks).
Expert Answer:
Answer rating: 100% (QA)
1 Partial Good will Good will 226 million 220 million 69 million Good will 37 million 2 Full ... View the full answer
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
Posted Date:
Students also viewed these accounting questions
-
Sweden acquired 100% of the equity shares of Oslo on 1 March 20X1 and gained control. At that date the balances on the reserves of Oslo were as follows: The Revaluation reserve Kr10 million Retained...
-
Entity P acquired 100% of the equity shares of Entity S at a cost of $750,000 on October Year 2 when the net assets of Entity S were $600,000. Entity P prepares its financial statements to 31...
-
Alpha has owned 80% of the equity shares of Beta since the incorporation of Beta. On 1 July 20X6 Alpha purchased 60% of the equity shares of Gamma. The statements of comprehensive income and...
-
Alexa owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following expenses in connection with her condo: Insurance $ 3,900 Mortgage interest 10,700 Property taxes 3,000 Repairs...
-
Consider a project with net benefits NBt in period t: NB0 = 30, NB1 = 15, NB2 = 25, NB3 = 3. a. Find the net present value if the discount rate is r = 6%, 8% and 10%. b. Now assume that the discount...
-
The table shows the mens and womens outdoor world records (in seconds) in the 800-m run. Let x be the year, with x = 0 corresponding to 1900. a. Find the equation for the least squares line for the...
-
One cubic meter of air at a pressure of 1.5 bar and \(80^{\circ} \mathrm{C}\) is compressed to final pressure 8 bar and volume \(0.28 \mathrm{~m}^{3}\). Determine: (i) mass of air, (ii) index of '...
-
Retirement of Bonds Payable on the Statement of Cash FlowsIndirect Method Redstone Inc. has the following debt outstanding on December 31, 2010: 10% bonds payable, due 12/31/14 $500,000 Discount on...
-
A weight of 100kN is hung by means of two strings from the ceiling as shown. Find the tension in two strings 60 T 1 100 kN 30 T2
-
Based on the latest results from Air Canada and the Royal Bank of Canada, calculate and comment on the Degree of Operating Leverage (DOL), Degree of Financial Leverage (DFL), and Degree of Combined...
-
Discuss risk mitigation strategies Pfizer may use for avoiding potential financial crisis and informing strategic financial decisions.
-
When should a manufacturer consider dealing direct with the public?
-
What disadvantages might family-line branding have over individual branding?
-
What is a prior-period adjustment?
-
What are two common accounting software systems used by small businesses?
-
How does the development of technology impact on brand building?
-
An investor has just purchased a ten year 5% coupon bond for a price of $69.28 per $100 of face value. What is the approximate percentage change in the price of the bond. If the yield curve is...
-
On January 2, 20X3, Sheldon Bass, a professional engineer, moved from Calgary to Edmonton to commence employment with Acco Ltd., a large public corporation. Because of his new employment contract,...
-
Alpha Ltd makes one standard article. You have been given the following information: 1. The inventor y sheets at the year-end show the following items: Raw materials: 100 tons of steel: Cost 140 per...
-
Purchases of a certain product during July were: Units sold during the month were: Required: Assuming no opening inventories: (i) Determine the cost of goods sold for July under three different...
-
On 20 December 20X6 one of Incident plc's Lorries was involved in an accident with a car. The lorry driver was responsible for the accident and the company agreed to pay for the repair to the car....
-
Show that the Lorentz group commutation relations (13.20) are satisfied by the choices \(K_{i}= \pm \frac{i}{2} \sigma_{i}\) and \(J_{i}=\frac{1}{2} \sigma_{i}\), where the \(\sigma_{i}\) are Pauli...
-
Verify that the Lorentz transformation (13.16) leaves invariant the squared Minkowski line element (13.5). Data from 13.5 Data from 13.16 T = F iF U = F6 iF7 V = F4 iF5.
-
Find the relationship of the eight SU(3) operators \(T_{ \pm}, V_{ \pm}, U_{ \pm}, T_{3}\), and \(Y\) defined in Eqs. (8.2) and (8.7)-(8.8), and the nine oscillator operators \(\left(A_{i}^{j}...
Study smarter with the SolutionInn App