Micro CO acquired 90% of the $100,000 ordinary share capital of Minnie CO for $400,000 on 1 January 20X3 when the retained earnings of Minnie CO were $50,000. At the date of acquisition the fair value of plant held by Minnie CO was $200,000 higher than its carrying value. The fair value of the non-controlling interest at the date of acquisition was $40,000.
What is the goodwill arising on the acquisition of Minnie CO?
Suggested solutions:
| Consideration | 400,000 | |
| Non-Controlling Interest | 40,000 | |
| 440,000 | ||
| Ordinary share | 100,000 | |
| Retained Earnings | 50,000 | |
| Fair Value of plant (surplus) | 200,000 | |
| 350,000 | ||
| Goodwill | 90,000 |
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2015 ACCA F3 CONSOLIDATED GOODWILL 2