The following are the statements of financial position of Fish plc and its subsidiary Chips Ltd as at 30 September 2020 [image] Notes to the Statements of Financial Position: Fish Plc acquired 9,000,000 ordinary shares (75%) in Chips Ltd on October 1 2019 when the retained earnings of Chips Ltd were £4,800,000. The non-controlling interests in the net assets of Chips Ltd at the date of acquisition were independently valued at £2,800,000. Goodwill was impaired in the amount of £40,000 for the year ended 30 September 2020 Required: A. Calculate the goodwill on acquisition of Chips Ltd. B. Account for the impairment of £40,000.
The following are the statements of financial position of Fish plc and its subsidiary Chips Ltd as at 30 September 2020 [image] Notes to the Statements of Financial Position: Fish Plc acquired 9,000,000 ordinary shares (75%) in Chips Ltd on October 1 2019 when the retained earnings of Chips Ltd were £4,800,000. The non-controlling interests in the net assets of Chips Ltd at the date of acquisition were independently valued at £2,800,000. Goodwill was impaired in the amount of £40,000 for the year ended 30 September 2020 Required: A. Calculate the goodwill on acquisition of Chips Ltd. B. Account for the impairment of £40,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The following are the
subsidiary Chips Ltd as at 30 September 2020
[image]
Notes to the Statements of Financial Position:
- Fish Plc acquired 9,000,000 ordinary shares (75%) in Chips Ltd on October 1 2019 when the
retained earnings of Chips Ltd were £4,800,000. - The non-controlling interests in the net assets of Chips Ltd at the date of acquisition were independently valued at £2,800,000.
Goodwill was impaired in the amount of £40,000 for the year ended 30 September 2020
Required:
A. Calculate the goodwill on acquisition of Chips Ltd.
B. Account for the impairment of £40,000.
Transcribed Image Text:Fish Plc
Chips Ltd
£000
£000
Assets
Non-current assets
Property, Plant and Equipment
Investment in Chips Ltd
16,560
13,240
8,300
Current Assets
4,970
3,950
Total Assets
29,830
17,190
Transcribed Image Text:Equity and Liabilities
Equity
Ordinary Share Capital (£0,50)
10,000
6,000
Retained Earnings
15,840
8,030
Total Equity
25,840
14,030
Current Liabilities
3,990
3,160
Total Equity and Liabilities
29,830
17,190
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