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Alpha plc invested €260,000 in 150,000 ordinary shares of €1 each in Zeta Ltd. At the...

Alpha plc invested €260,000 in 150,000 ordinary shares of €1 each in Zeta Ltd. At the

date of acquisition the equity of Zeta Ltd comprised €200,000 in share capital and

€120,000 in retained earnings. What is the value of goodwill at the date of

acquisition? How is this calculated step-by-step?

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solution: Investment cost Less : share in net assets (refer working) Goodwill 260000 20000 working: % holding of Alpha in Zeta-150000/200000 | 75%) share capital retained earning net assets x% holding Alphas share in net assets of Zeta 200000 120000 320000 5% 240000 Shee107 Sheed108 Sheet1109Shee1110Sheet111 Sheet1 112 Sheet1 113Sheet1114 D יו.TW..1 UK 09/01/2019

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