Warsaw Ltd acquired 60% of the ordinary shares of Krakow Ltd on 1 September 2020 when the issued share capital of Krakow Ltd was €3 million and its retained earnings €1 million. The consideration is as follows:The issue of one million ordinary €1 shares in Warsaw Ltd at market value €2.20;A cash payment of €330,000.The non-controlling interests in the net assets of Krakow Ltd as at 1 September 2020 is valued at €1,650,000.Required: Calculate the following as at 1 September 2020:GoodwillNon-controlling interests

Issue of One Million Shares @ 2.20 = €2.53 million Cash Payment = €330,000 Issued share capital = €3…

Answered: Warsaw Ltd acquired 60% of the ordinary…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Warsaw Ltd acquired 60% of the ordinary shares of Krakow Ltd on 1 September 2020 when the issued share capital of Krakow Ltd was €3 million and its retained earnings €1 million. The consideration is as follows:

The issue of one million ordinary €1 shares in Warsaw Ltd at market value €2.20;
A cash payment of €330,000.

The non-controlling interests in the net assets of Krakow Ltd as at 1 September 2020 is valued at €1,650,000.

Required:

Calculate the following as at 1 September 2020:

Goodwill
Non-controlling interests

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