On 1 January 2009, Hornet plc acquired 3,307,500 shares out of the 16,537,500 outstanding shares of Alton plc for $ 56 M. The fair value of net assets of Alton at this date was $ 441 M. Alton earned a profit of $175 M for year ended 31/12/2009 and paid $ 56 M dividend. On 1 January 2010, Hornet acquired 6,615,000 additional shares in Alton for a further cash payment of $ 84 M. The fair value of identifiable net assets of Alton at 1 January 2010 was $ 612.5 M. The full goodwill method is used.

The goodwill recognized on 1 January 2010 is ?

Select one:

a. Negative goodwill of $ 114.1875 M

b. None of the answers is correct

c. Negative goodwill of $ 405.2 M

d. $13.125 M

e. No goodwill is recognized as this is treated as a transaction between the owners

The FV of consideration paid (purchase price) to calculate the value of goodwill on 1 January 2010 ?

Select one:

a. $35.4375 M

b. $ 84 M

c. $ 42 M

d. $ 126 M

e. None of the answers is correct

The carrying value for the investment in Alton on 31 December 2009 is?

Select one:

a. $126 M

b. $ 31.5 M

c. $ 79.8 M

d. $112 M

e. None of the answers is correct

on 1 January 2010, The FV of the 3,307,500 shares that were purchased on 1 January 2009 is equal to ?

Select one:

a. $ 49.875 M

b. $ 11.8125 M

c. $ 48.125 M

d. $ 42 M

e. None of the answers is correct