Nat Ltd. purchases a 100 percent interest in Angourie Ltd. the cost of the acquisition of $1,400,000 plus associated legal costs of $70,000. At the date of acquisition, the statement of financial position of Angourie Ltd. shows:

Additional information: - The assets and liabilities of Angourie Ltd are fairly stated except for land and buildings, which have a fair value of $800 000 - Angourie Ltd has undertaken some basic research, which is not recorde din the statement of financial position, and which cost $50 000. - There are no contingent liabilities.

Required: a.) Determine for accounting purposes the amount of goodwill that has been acquired by Nat Ltd. b.) Further, why would Nat Ltd have been prepared to pay for goodwill? Can Nat Ltd revalue the goodwill upwards in a subsequent period?

Assets Current assets Cash Accounts receivable Provision for doubtful debts Inventory Total current assets Non-current assets Land and buildings, at cost Accumulated depreciation-land and buildings Plant and equipment Accumulated depreciation-plant and equipment Total non-current assets Total assets Liabilities Current liabilities Accounts payable Bank overdraft Total current liabilities Non-current liabilities Bank loan Total liabilities Net assets 80000 (10000) 850000 (150 000) 510000 (100000) 20000 70000 100000 190000 700000 410000 1110000 90000 20000 110000 190000 1300 000 300 000 1000000