1. Calculate the Goodwill

Solve only if you know the answer.

Financial statements for three entities for the year ended 30 June 208 are as follows: On 1 July 207, Borough purchased 45,000 shares in High for $100,000. At that date, High had retained earnings of $30,000 and no other components of equity. High's net assets had a fair value of $120,000 and the fair value of the non-controlling interest was $55,000. It is group policy to value the non-controling interest at acquisition at fair value. The excess of the fair value of High's net assets over their carrying amounts at the acquisition date relates to property. plant and equipment. This had a remaining estimated useful life of five years at the acquisition date. Goodwill has been subject to an impairment review and it was determined to be impaired by $7,000. On 1 July 207, Borough purchased 10,500 equity shares in Street for $21,000. At that date, Street had retained earnings of $25,000 and no other components of equity. During the year Borough sold goods too High for $10,000 at a margin of 50%. By the reporting date, High had only sold 80% of these goods. Included in the receivables of Borough and the liabilities of High are intragroup balances of $5,000. On 5 July 208, Borough received notification that an employee was claiming damages against them as a result of a work-place accident that took place on 30 April 208. Lawyers have advised that there is a 60% chance that Borough will lose the case and will be required to pay damages of $30,000