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ACCA F3 Consolidated Accounts Goodwill

W CO purchased 24,000 ordinary shares in R CO for $ 75,200 five years ago when R's retained earnings was $ 14,000.

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

Ordinary Shares $1	30,000
Retained Earnings	70,000

The fair value of the non-controlling interest at acquisition was $8,800.

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

Suggested solutions:

Cost $	75,200
Add NCI	8,800
Less Shares $	30,000
Less Retained Earnings	14,000
Goodwill	40,000

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