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ACCA F3 Consolidated Accounts Goodwill

W CO purchased 8,000 ordinary shares in R CO for $ 42,800 five years ago when R's retained earnings was $ 6,000.

R's equity and reserves at 31 July 2013 were as follows:

Ordinary Shares $1	10,000
Retained Earnings	30,000

The fair value of the non-controlling interest at acquisition was $3,200.

What was the goodwill arising on the acquisition of R CO?

Suggested solutions:

Cost $	42,800
Add NCI	3,200
Less Shares $	10,000
Less Retained Earnings	6,000
Goodwill	30,000

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