On 1 July 2014 Good Ltd acquired a 100% interest in Life Ltd.At that time Life Ltd had goodwill of $10 000 recorded in its statement of financial position as a result of a previous business combination.The total goodwill arising on Good's acquisition of Life was $24 000.The goodwill to be recognised on consolidation as a result of Good's acquisition of Life is:
A)nil.
B)$10 000.
C)$14 000.
D)$24 000.

Question

Quizplus · Accepted Answer

Goodwill arising on acquisition of Life Ltd by Good Ltd was $24,000. Out of this, $10,000 was already recorded as goodwill in Life Ltd's statement of financial position. Therefore, the goodwill to be recognised on consolidation is $24,000 - $10,000 = $14,000. Therefore, choice C is correct.

On 1 July 2014 Good Ltd Acquired a 100% Interest