David Ltd purchases a 100 per cent interest in Roger Ltd. The cost of the acquisition is $1 500 000 plus associated legal costs of $80 000. As at the date of acquisition, the statement of financial position of RogerLtd showsnet assets $5,000,000.

Determine, for accounting purposes, the amount of goodwill that has been acquired by Roger Ltd.

a.

$40000

b.

$35000

c.

None of the answers given

d.

$30000