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

berty09090909

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

hkaur92

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.

berty09090909

Hi @hkaur92 , thank you for this, it is a great help.

Rob

sandy78

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

BlueJeans

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

BlueJeans

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

Nicolle11

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???

zippi

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.

NicoleBulmer

I am doing my exam today and cannot figure out how we get the retained earnings figure. please help!!