dec 07 dfs paper goodwill anyone help?
ema192
Registered Posts: 107 Dedicated contributor 🦉
I am having trouble understanding this goodwill workings on the paper for consoldated balance sheet. It seems different to any other i have done,
so far i got
cost 26000
Retained earnings 12052
Share Capital 12000
Share Premium4000
Revaluation 3000
Post acquisition 5040
36092 75% of group share 27069
goodwill 27069-cost 26000= 1069
but the answers state goodwill 2711
in confused now cause i thought id finally figured this out and now another hurdle appears arrggghhhhhh, anyone help if they are doing the same paper??
Thanks
Emma
so far i got
cost 26000
Retained earnings 12052
Share Capital 12000
Share Premium4000
Revaluation 3000
Post acquisition 5040
36092 75% of group share 27069
goodwill 27069-cost 26000= 1069
but the answers state goodwill 2711
in confused now cause i thought id finally figured this out and now another hurdle appears arrggghhhhhh, anyone help if they are doing the same paper??
Thanks
Emma
0
Comments
-
Ive done this one - the 75% attributable to the parent at acquisition does not include post acquisition retained earnings (3780) .. so goodwill = consideration/cost £26,000 - £23,289 = £2711
Hope that helps - i can do them but please dont ask me to explain!!!0 -
Hi Emma,
I think what you have done is included the post acquisition retained earnings. For goodwill you do the shares, retained earnings and revaluation at acquisition date.
Therefore: 12,000 + 4,000 + 12,053 + £3,000 = 31, 052
Work out 75% of this = £23,289.
Then cost £26,000 - £23,289 = £2,711.
The post aquisition retained earnings figure is used when calculating the consolidated retained earnings figure and not goodwill.
Hope this helps0 -
Hiya
Thankyou i understand now looking through my notes didnt seem to help at all, but your explanations helped!!
I think theres only so much my brain can take in a day!
emma :-)0
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