Alpha paid £300,000 on 1.1.2010 to acquire 80% of Beta. On that date Beta had in issue one hundred thousand ordinary shares of £1 each issued at 120p each, but quoted on this date at 145p. Identify the goodwill in Beta in each of the following alternative situations.

(a) On 1.1.2010 Beta’s retained earnings were £30,000 and the fair value of its identifiable assets the same as their book value

(b) On 1.1.2010 Beta’s retained earnings were £60,000 and the fair value of their identifiable assets £80,000 more than their book value

(c) On 1.1.2010 Beta’s earnings were £50,000 and while their non-current assets had a fair value £80,000 more than the book value, the investments held by Beta had a fair value £30,000 less than the book value

(d) On 1.1.2010 Beta had an accumulated loss of £40,000, though its non-current assets had a fair value which exceeded the book value by £120,000

Transcribed Image Text:

W w £170,000 x £200,000 y £199,000 z £212,500