The summarised statements of profit or loss of Bing and Crosby, for the year ended 31 October 2021, are provided below. Bing acquired 3,600,000 ordinary shares in Crosby for $5,250,000 on 1 November 2020 when the retained earnings of Crosby were $300,000. On the same date, Bing also acquired 40% of Crosby's loan notes of $400,000. (8) Statements of profit or loss for the year ended 31 October 2021 Bingo $000 (9) Revenue Cost of sales Gross profit Distribution costs Administrative expenses Profit before tax Income tax expense Profit for the year The following information is also available: (7) Finance costs Income from Crosby: Loan note interest Dividends 9,600 (5,550) 4,050 (1,050) (1,650) 10 150 1,510 (600) 910 Crosby S000 3,900 (2,175) 1,725 (480) (735) (25) 485 (120) 365 Crosby's total share capital consists of 6,000,000 ordinary shares of $1 each. It is group policy to value the non-controlling interest at fair value. The fair value of the noncontrolling interest at the acquisition date was $3,200,000. During the year ended 31 October 2021, Bing sold goods costing $200,000 to Crosby for $300,000. At 31 October 2021, 50% of these goods remained in Crosby's inventory. Required: Calculate the goodwill arising on the acquisition of Crosby.
The summarised statements of profit or loss of Bing and Crosby, for the year ended 31 October 2021, are provided below. Bing acquired 3,600,000 ordinary shares in Crosby for $5,250,000 on 1 November 2020 when the retained earnings of Crosby were $300,000. On the same date, Bing also acquired 40% of Crosby's loan notes of $400,000. (8) Statements of profit or loss for the year ended 31 October 2021 Bingo $000 (9) Revenue Cost of sales Gross profit Distribution costs Administrative expenses Profit before tax Income tax expense Profit for the year The following information is also available: (7) Finance costs Income from Crosby: Loan note interest Dividends 9,600 (5,550) 4,050 (1,050) (1,650) 10 150 1,510 (600) 910 Crosby S000 3,900 (2,175) 1,725 (480) (735) (25) 485 (120) 365 Crosby's total share capital consists of 6,000,000 ordinary shares of $1 each. It is group policy to value the non-controlling interest at fair value. The fair value of the noncontrolling interest at the acquisition date was $3,200,000. During the year ended 31 October 2021, Bing sold goods costing $200,000 to Crosby for $300,000. At 31 October 2021, 50% of these goods remained in Crosby's inventory. Required: Calculate the goodwill arising on the acquisition of Crosby.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:V27
The summarised statements of profit or loss of Bing and Crosby, for the year ended 31 October 2021,
are provided below. Bing acquired 3,600,000 ordinary shares in Crosby for $5,250,000 on 1
November 2020 when the retained earnings of Crosby were $300,000. On the same date, Bing also
acquired 40% of Crosby's loan notes of $400,000.
(8)
Statements of profit or loss for the year ended 31 October 2021
Bingo
$000
(9)
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Profit before tax
Income tax expense
Profit for the year
The following information is also available:
Finance costs
Income from Crosby: Loan note interest
Dividends
9,600
(5,550)
4,050
(1,050)
(1,650)
10
150
1,510
(600)
910
Crosby
$000
3,900
(2,175)
Required: Calculate the goodwill arising on the acquisition of Crosby.
1,725
(480)
(735)
(25)
485
(120)
365
||
Crosby's total share capital consists of 6,000,000 ordinary shares of $1 each.
It is group policy to value the non-controlling interest at fair value. The fair value of the
noncontrolling interest at the acquisition date was $3,200,000.
During the year ended 31 October 2021, Bing sold goods costing $200,000 to Crosby for
$300,000. At 31 October 2021, 50% of these goods remained in Crosby's inventory.
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