On 1 January 2009, Hornet plc acquired 30% of equity shares of Alton plc for $ 2 M. The fair value of net assets of Alton at this date was $6. Alton earned a profit of $ 2 M for year ended 31/12/2009 and paid $ 1 dividend. On 1 January 2010, Hornet acquired an additional 60% in Alton for a further cash payment of $ 6 M. The fair value of identifiable net assets of Alton at 1 January 2010 was $ 8M. The full goodwill method is used.

Use the above to answer the following

Solve the question in details as we took in class and then answer the questions

1. What is the carrying value for the investment in associate (Alton) on 31 December 2009?
2. What is the FV of the previously held 30% interest in Alton on 1 January 2010?

3. What is the gain/loss on re-measuring the previously held 30% interest in Alton on 1 January 2010?
4. What is the goodwill recognized on the date Hornet gained control over Alton?