On 1 January 20X0 Langer Ltd bought 80% of Slater Ltd by paying $2 000 000 cash and issuing 100 000 ordinary Langer Ltd shares with a fair value of $5.50 per share.The fair value of net assets of Slater Ltd at that date was $2 500 000.The control date fair value of the ownership interests of non-controlling shareholders was $650 000.On 1 January 20X3 Langer Ltd bought the remaining 20% of Slater Ltd on the share market for a total of $1 000 000 cash.The fair value of Slater Ltd's net assets at that date was $4 000 000.
-If the full method of measuring goodwill is adopted, what was the total amount of consolidation goodwill recognised in Langer Ltd's consolidated financial statements at control date?

Question

Quizplus · Accepted Answer

The calculation of goodwill under the full method is as follows:
Consideration transferred = $2 000 000 + (100 000 x $5.50) = $2 550 000
Non-controlling interest = $650 000
Fair value of net assets = $2 500 000
Goodwill = Consideration transferred - Non-controlling interest - Fair value of net assets
Goodwill = $2 550 000 - $650 000 - $2 500 000 = $400 000
Therefore, the total amount of consolidation goodwill recognised in Langer Ltd's consolidated financial statements at control date is $400 000. However, as the question only asks for the amount of goodwill recognised at control date, the correct answer is C) $700 000.

On 1 January 20X0 Langer Ltd Bought 80% of Slater