Graham Limited acquired 90% of the share capital and reserves of Terry Limited for $170,000. Share capital was $ 100 000 and reserves amounted to $62 000. All assets and liabilities were recorded at fair value except equipment which was recorded at $30 000 below fair value. The company tax rate was 30%. The partial goodwill method is adopted by the group. The NCI share of equity at the date of acquisition was: Question 7Select one: a. $17 000 b. $19 200 c. S 16 200 d. $18 30

Graham Limited acquired 90% of the share capital and reserves of Terry Limited for $170,000. Share capital was $ 100 000 and reserves amounted to $62 000. All assets and liabilities were recorded at fair value except equipment which was recorded at $30 000 below fair value. The company tax rate was 30%. The partial goodwill method is adopted by the group. The NCI share of equity at the date of acquisition was: Question 7Select one: a. $17 000 b. $19 200 c. S 16 200 d. $18 30

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Graham Limited acquired 90% of the share capital and reserves of Terry Limited for $170,000. Share capital was $
100 000 and reserves amounted to $62 000. All assets and liabilities were recorded at fair value except equipment which
was recorded at $30 000 below fair value. The company tax rate was 30%. The partial goodwill method is adopted by
the group. The NCI share of equity at the date of acquisition was: Question 7Select one: a. $17 000 b. $19 200 c. $
16 200 d. $18 30

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Step 1: Determination of Fair Value of Identifiable Net Assets Acquired:

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