Recently Sunshine Ltd acquired 80% of the issued shares of Valley Ltd for $800,000 (Valley Ltds owners equity at the time of purchasing was $700,000 made up of share capital of $500,000 and retained earnings of $200,000). One of the liabilities of Valley Ltd was $50,000 for dividend payable but not yet paid and our accountant informed me that the shares were acquired based on cum-dividend. In addition, one of the assets in the statement of financial position of Valley Ltd was $35,000 for goodwill. Having prepared the acquisition analysis as part of preparing the consolidated financial statements for Sunshine Ltd, can you explain how does the recorded goodwill of $35,000 by the subsidiary Valley Ltd affect the groups goodwill? I believe the goodwill for Sunshine Ltd should be $100,000 (being $800,000 less $700,000). Is this correct? In addition, will the dividend payable by the subsidiary entity Valley Ltd impact the acquisition analysis? Please explain?