PART A a Santa Cruz Limited (SCL) is a distribution company, located in Western Jamaica. The following information is available: SCL acquired control of Cornwall Industries Limited (CIL) by offering 2 shares in SCL for every 3 shares held in CIL. Santa Cruz Limited acquired 6,400,000 shares in CIL and at that date each share in Santa Cruz Limited had a market value of $7.30. An additional sum of $2,600,000 was to be paid two years from now (the relevant discount rate is 12%). The identifiable assets and liabilities of Cornwall Industries Limited were: Assets Property. Plant and Equipment Inventory & Receivables Trade Payables Land Bank overdraft Loans Value $ 9,000,000 2.000.000 6,000,000 19,000,000 1.100.000 6.200.000 Required: a) Calculate the goodwill acquired by Santa Cruz Limited (6 marks) b) Explain what is inherent goodwill and why it is not recorded in the books of account (4 marks) PART B Hillshire gas station has an excellent location because of its strategic location at the intersection of two major roads. The directors believe an intangible asset should be recognized for this excellent location. Explain briefly to the directors how the excellent location should be treated in the books of accounting, (6 marks)