Brooks Ltd paid $680 000 for 80% of the shares of Samba Ltd on 1 July 2011.All identifiable assets and liabilities of Samba Ltd were recorded at fair value.The NCI in Samba Ltd was considered to have a fair value of $168 000.At the date of acquisition the equity of Samba Ltd was: $$\begin{array} { l c }
&\$\
\text { Share capital } & 400~000 \
\text { General reserve } & 240~000 \
\text { Retained earnings } & 180~000
\end{array}$$ What is the total amount of goodwill?
A)$24 000
B)$140 000
C)$4 000
D)$28 000

Question

Brooks Ltd paid $680 000 for 80% of the shares of Samba Ltd on 1 July 2011.All identifiable assets and liabilities of Samba Ltd were recorded at fair value.The NCI in Samba Ltd was considered to have a fair value of $168 000.At the date of acquisition the equity of Samba Ltd was: $$\begin{array} { l c } 
&\$\
\text { Share capital } & 400~000 \
\text { General reserve } & 240~000 \
\text { Retained earnings } & 180~000
\end{array}$$ What is the total amount of goodwill?
A)$24 000
B)$140 000
C)$4 000
D)$28 000

Quizplus · Accepted Answer

The Answer is C

Brooks Ltd Paid $680 000 for 80% of the Shares