Financial Statements (2013) Practice Assessment 1 Task 1.6 (Goodwill)

Hello everyone,

I wonder if someone could help me, I am a bit stuck on the practice assessment task 1.6 in relation to calculating goodwill. The answer is 427 but I am not sure how to get to this answer? Please help! Thanks you :)

Rob J


Comments

  • hkaur92hkaur92 Posts: 28Registered
    Hi @berty09090909‌

    Answer:

    Goodwill
    Price paid = 1400
    LESS: share capital (1,000 x 70%) = (700)
    retained earnings (190 x 70%) = (133)
    revaluation reserve (200 x 70%) = (140)
    Consolidated Goodwill = 427

    Hope this helps your answer.
  • berty09090909berty09090909 Posts: 3Registered
    Hi @hkaur92 , thank you for this, it is a great help.

    Rob
  • sandy78sandy78 Posts: 3Registered
    Hi I ma stuck on the same question but on how to find NCI? Answer is 435 but i dont get the same answer....Any help would be much appreciated!
    Thanks
  • BlueJeansBlueJeans LondonPosts: 53Registered
    sandy78 said:

    Hi I ma stuck on the same question but on how to find NCI? Answer is 435 but i dont get the same answer....Any help would be much appreciated!
    Thanks

    Share Capital attributable to NCI (1000x30%) =300
    Retained earnings attributable to NCI (250x30%) =75
    Revaluation reserve attributable to NCI (200x30%) =60

    Total NCI= 300+75+60=435
    Believe you can and you're halfway there...
  • BlueJeansBlueJeans LondonPosts: 53Registered
    Has anyone recently sat Financial Statement?
    How was it compared with the AAT assesements online? Any area where you found something difficult? Anything about the written task?

    Thanks in advance
    Believe you can and you're halfway there...
  • Nicolle11Nicolle11 Posts: 2Registered
    Hi, Im really struggling with consolidated statements on this exam. Im currently doing this question on the practice exam and its the retained earning figure that is confusing me. Why am I doing 190 x 70% instead od 250 x 70%. The only thing I can thing of is cancelling out the 60 inter company sale but I thought that would effect the parent not the subsidiary???
  • zippizippi Feels At Home Posts: 182Registered
    Hi Nicolle11,

    I have just recently learnt this and as far as I can understand, you do not do 250x 70% or 190x70%, instead you have to think that at the date of acquisitions Hill Ltd's retained earnings were £190k, figure of £250 is of post acquisition, in simple English when beacon ltd acquired 70% of the share capital on 1 July 20x0, retained earnings of hill Ltd were-£190,000. Therefore you have to take that amount out of £250k which relates to June 20x1. So (250-190) = 60x70% would give you 42k.

    I hope this has answered your question well, if not someone can explain this better here.
  • NicoleBulmerNicoleBulmer Posts: 2Registered
    I am doing my exam today and cannot figure out how we get the retained earnings figure. please help!!
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