Victoria Corp acquired 80 per cent of the share capital of Whitehorse Corp on 1 July 2019. As at the date of acquisition, Whitehorse’s retained earnings was $40,000. On this date, the fair value of the 20% non-controlling interest in Whitehorse was $25,000. Ignore the tax rate.
The statements of the financial position of Victoria Corp and Whitehorse Corp as at 30 June 2020 are as follows:
| Victoria Corp
($) |
Whitehorse Corp
($) |
||||||
| Current assets | 320,000 | 168,000 | |||||
| Non-current assets: | |||||||
| Property, plant and equipment | 190,000 | 36,000 | |||||
| Investment (in Whitehorse) | 100,000 | – | |||||
| 290,000 | 36,000 | ||||||
| 610,000 | 204,000 | ||||||
| Current liabilities | 270,000 | 94,000 | |||||
| Shareholders’ equity: | |||||||
| Share capital | 200,000 | 60,000 | |||||
| Retained earnings | 140,000 | 50,000 | |||||
| 610,000 | 204,000 | ||||||
Required:
(a) Calculate the amount of goodwill arising from the acquisition of Whitehorse Corp. Clearly show your workings.
(b) Based on the information provided above, calculate the non-controlling interests as at 30 June 2020. Clearly show your workings.
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