QUESTION 4 [27 marks (A) France Limited acquired the business of...
70.2K
Verified Solution
Link Copied!
Question
Accounting
QUESTION 4 [27 marks (A) France Limited acquired the business of England Limited for an immediate purchase consideration of $9,000,000 and a deferred payment of $4,000,000 in two years (cost of capital 14%). The assets and liabilities taken over were as follows: Land and Buildings Machinery and Equipment Inventory Receivables $14,000,000 $7,000,000 $1,000,000 $400,000 $5,000,000 Loans Accruals $2,000,000 Required: 1. Calculate the goodwill acquired by France Limited (6marks) 2. Explain the accounting treatment for the goodwill calculated in (a) above according to IFRS 3 (4marks) 3. Explain to the directors of France Limited why excellent customer service provided by the company cannot be included in the books of accounts as goodwill. (5marks)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
