=+ DAT Limited will return to profit. The purchase consideration comprised deferred consideration of €3,000,000, pay- able in equal instalments on 31 December 2004, 2005 and 2006. The book value of the net assets of DAT Limited was €2.2m. This included land with a book value of €800,000 but a market value of €1.1m. XTRA plc incurred accountamcy fees of €60,000 and legal fees of €40,000 in con- nection with the acquisition, and €40,000 in respect of time spent by directors of XTRA ple. Requirement

(a) Calculate the goodwill to be dealt with in the consolidated financial statements of XTRA plc for the year ended 31 December 2003.

(b) Explain clearly the treatment of the deferred consideration in the statement of comprehensive income of XTRA plc for the year ended 31 December 2003 and the statement of financial position at that date. NB The following annuity table (extract) should be used where appropriate: Period 1 Zz 3 10% 0.9090 0.8264 0.7513