Question 3ABC Ltd acquires 100 per cent of RedCarpet Ltd on 1 July 2021. ABC Ltd pays the shareholders ofRedCarpet Ltd the following consideration:Cash35 000Plant and equipmentfair value $125 000; carrying amount in the books of ABCLtd $85 000fair value $150 000; carrying amount in the books of ABCLtd $100 000LandThere are also legal fees of $95 000 involved in acquiring RedCarpet Ltd.On 1 July 2021 RedCarpet Ltd's statement of financial position shows total assets of $300 000 andliabilities of $150 000. The fair value of the assets is $400 000.Required:a) Has any goodwill been acquired and, if so, how much?b) And discuss the potential for including associated legal fees into the cost of acquiringRedCarpet using appropriate accounting standard.

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Required: a) Has any goodwill been acquired and, if so, how much? b) And discuss the potential for including associated legal fees into the cost of acquiring RedCarpet using appropriate accounting standard.

Required: a) Has any goodwill been acquired and, if so, how much? b) And discuss the potential for including associated legal fees into the cost of acquiring RedCarpet using appropriate accounting standard.

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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