Some years ago Parent P acquired 80% of the issued share capital of Subsidiary S for CU5,000. At that time S’s balance sheet showed net assets of CU4,000. Fair value adjustments totaling CU800 were recognized in the business combination. P decides to recognize non-controlling interests using the proportionate share of net assets method rather than fair value.S’s summary balance sheet is, therefore :

Individual FS FV Adjustment

net assets 4,000 800

Share capital 2,500

Other reserves 1,500

1. Having added together P’s and S’s individual balance sheets, the entries to eliminate P’s investment, are as follow. The amount of goodwill registered to eliminate P’s investment is (indicate also if you will debit or credit the account):

2. The amount of NCI registered to eliminate P’s investment is (indicate also if you will debit or credit the account):

3. The amount of “share capital” registered to eliminate P’s investment are (indicate also if you will bedit or credit this account):

4.The amount of “net assets” registered to eliminate P’s investment are (indicate also if you will bedit or credit this account):

Answer rating: 100% (QA)

Calculation of Goodwill Particulars Calculation Amount C... View the full answer