Wilson Ltd purchases 100% interest in Jones Ltd. The cost of acquisition is $525,000 plus associated legal costs of $30,000. As at the date of acquisition, the statement of financial position of Jones Ltd shows: $ Assets Current assets Cash 5,000 Accounts receivable 25,000 Inventory 70,000 Total current assets 100,000 275,000 Non-current Assets Land and Buildings, at net Plant and Equipment, at net Total non-current assets Total assets 150,000 425,000 525,000 Liabilities Current liabilities 35,000 15,000 Accounts payable Bank overdraft Total current liabilities Non-current liabilities 50,000 Bank loan 100,000 Total liabilities 150,000 Net assets 375,000 Total liabilities 150,000 Net assets 375,000 Additional information: The assets and liabilities of Jones Ltd are fairly stated, except for the following: 1. Land and Building have a fair value of $330,000 Some of the inventory has damaged and their fair value is $53,000. Jones Ltd has a patent that is not recorded in the statement of financial position but has a fair value of $43,000. There are no contingent liabilities. 2. 3. 4. Question 1c)0 (6 Marks) Determine, for accounting purposes, the amount of goodwill that has been acquired by Wilson Ltd. . 1 Enter your answer into the table below. You may also show workings UNDERNEATH the table where indicated. Question 1(c)(it) (3 Marks) Why do you think that Wilson Ltd would have been prepared to pay for goodwill? A B 1 II! to III 2 $5 Question 1(c)(111) (3 Marks) Can Wilson Ltd revalue the goodwill upwards in a subsequent period? A B 1 : to 2 'S