Answer Happy

Griffin Plc purchased 60% of Nolan's Plc 2.4 million £1 shares on 1st January 2020. Consideration comprised of £2,400,000 cash at the acquisition date and £1,200,000 of cash payable on 1st January 2022. Part of consideration was also 2 shares in Griffin Plc for every 5 shares purchased in Nolan Plc. The market value of Griffin's and Nolan's shares as at 1st January 2020 were £4 and £3 respectively. The fair value of Nolan's net assets as at 1st January 2020 was £7,000,000, and the non-controlling interest in Nolan was measured a fair value. Griffin Plc has a cost of capital of 10 %. DF 0.826. Calculate the amount of goodwill to be shown in the statement of financial position as at 31st December 2020 by filling in the blanks: Consideration is calculated as the total of cash £ Blank 1 plus deferred cash E Blank 2 plus shares £ Blank 3. The amount of NCI at the acquisition date is £ Blank 4. Net assets at the acquisition date is £ Blank 5. Goodwill amount to be presented in the consolidated statement of financial position is E Blank 6. Add your answer Blank 1 Blank 2 Blank 3 Blank 4 Add your answer Add your answer Add your answer

Question 4 Which of the following statement is/are true? i. In the consolidated statement of profit or loss, the unrealised profit adjustment will increase the cost of sales. il. In the consolidated statement of profit or loss, the unrealised profit adjustment will decrease the cost of sales iii. In the consolidated statement of profit or loss, the unrealised profit adjustment will decrease the non- controlling interest if the subsidiary is the seller iv. In the consolidated statement of profit or loss, the unrealised profit adjustment will decrease the non- controlling interest if the parent is the seller A) ii. and iv. B) i and iii. (o) 5 Points ii. only iii. only