Partners Ltd operates a car manufacturing plant. It has decided to purchase a 100 per cent interest in Sole Ltd, a manufacturing company. The cost of the acquisition is $5,000,000 plus associated legal costs of $10,000.

As at the date of acquisition, the statement of financial position of Sole Ltd shows:

	$	$	$
Assets
Current assets
Cash		110,000
Accounts receivable	60,000
Provision for doubtful debts	(10,000)	50,000
Inventory		140,000
Total current assets		300,000
Non-current assets
Buildings, at cost	700,000
Accumulated depreciationbuildings	(150,000)	550,000
Plant and equipment	400,000
Acc. depreciationplant and equipment	(100.000)	300,000
Total non-current assets		850,000
Total assets			1,150,000
Liabilities
Current liabilities
Accounts payable		70,000
Bank overdraft		30,000
Total current liabilities		100,000
Non-current liabilities
Bank loan		250,000
Total liabilities			350,000
Net assets			800,000

Additional information

The assets and liabilities of Sole Ltd are fairly stated, except for the following:

Buildings have a fair value of $400,000.

Some of the inventory items cannot be used for production. The total inventory has a fair value of $50,000.

Sole Ltd has a Trademark. The trademark was not recorded in the statement of financial position. It has a fair value of $500,000.

Required

Determine, for accounting purposes, the amount of goodwill that has been acquired by Partners Ltd.

(3 Marks)

Required

Calculate the amount of goodwill?