P Co. acquired 60% of the 200,000 $1 equity shares of S Co. on 1 April 2021 when the retained earnings of S were $350,000. Consideration comprised 300,000 by cash, and X payable on 31 March 2022, and 2 shares in P for each 5 shares acquired. The book values of S’s net assets at acquisition date were equal to their fair values except a borrowing which had a book value of $400,000 and a fair value of $500,000.

The market value of P’s shares on 1 April 2021 was $1.5 and P has a cost on capital of 10%.

Requirements: Find X value so that the goodwill at the acquisition date is positive. Calculate the goodwill arising on acquisition.