practice question - ex 5.2.pdf

practice question - ex 5.2.pdf - Ex 5.2 NCI Ant and Bug...

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Ex 5.2 – NCI – Ant and Bug Part 1 Assume also the following additions/corrections to exercise E 5.2 (not in the text book): 1. Ant Ltd sold $100,000 of inventory to B Ltd. At the end of the year, B Ltd still had $40,000 on hand which included $5,000 unrealised profit 2. Bug Ltd sold $60,000 of inventory to A Ltd. At the end of the year, A Ltd still had $60,000 on hand which included $7,000 unrealised profit 3. Assume the consideration paid was $2,000,000 (not $1,800,000 as shown on page 328) Part 2 Assume again that the consideration paid was $2,000,000 (not $1,800,000) and this time assume the directors adopt the 100% goodwill method. You are advised that the fair value of the NCI was $480,000 at the date of acquisition. Required: Determine goodwill at the date of acquisition. What would NCI have been at the date of acquisition if we had adopted the partial method? Exercise 5.2 Ant Ltd and Bug Ltd Acquisition analysis for Ant Ltd investment in Bug Ltd $ $ Cost of acquisition of investment: Consideration transferred 2,000,000 Carrying amount of identifiable assets and assumed liabilities at date of acquisition represented by: Issued capital 1,000,000 Retained earnings 1.1.X9 800,000 General reserve 100,000 1,900,000 Fair value adjustment: Land 500,000
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