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

berty09090909
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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

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

28Answer:

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.

3Rob

3Thanks

56Retained 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...56How 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...2182I 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.

2