Question 5 On 1 January 20X0 Ha January 20X0 Hill pic purchased 70% of the ordinary shares of Valley plc for 1.3 million. The fair of the non-controlling interest at that date was 0.5 million. At the date of acquisition, Valley's retained earnings were 0.4 million. The statements of financial position of Hill and Valley at 31 December 20X0 were: Capital and reserves Share capital Retained earnings Hill 000 5,000 3,500 8,500 8,500 Volley 000 1,000 200 1,200 1,200 Net assets Because of Valley's loss in 20X0, the directors of Hill decided to write down the value of goodwill by 0.3 million. The directors of Hill propose to use Method 2 to calculate goodwill in the consolidated statement of financial position. The goodwill is to be written down in proportion to the respective hold- ings of Valley's shares by Hill and the non-controlling interest Required: (a) Calculate the goodwill of Valley relating to Hill plc and the non-controlling interest. (b) Show how the goodwill will be written down at 31 December 20x0, for both Hill ple and the non- controlling interest (c) Comment on your answer to part (b)