Need a bit of help!

shaneomax

Hi there I ran into this question on consolidated financial statements and was wondering if anyone could help.

I am not really sure what £420000 in 240000 ordinary £1 shares mean, have looked everywhere for an answer including the textbook itself but still, I have no idea what it actually means, I am ok with working out the goodwill once I know how to calculate this amount, so if anyone can help, it would be much appreciated.

Thank you.

shamilkaria

Hi @shaneomax

I hope you are well?

I think this should be the answer please do let me know and I can try to give you a full breakdown

So to calculate Goodwill first we need to work out the Consideration / Proceeds at the date of Acquisition which is :

£420,000 made up of 80% Carline PLC acquired

Non Controlling Interest (NCI) at Acquisition - £300,000 + £160,000 x 20% = £92,000

Next less the comprised Fosse Shares of £300,000 - £160,000 Retained Earnings this gives us £140,000.

So Goodwill total is £420,000 + £92,000 - £140,000 = £372,000 (Answer)

Do let me know if this is correct and I can explain further if not I can look into it further

Kind regards

Shamil