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    • Question

      Parent Co. acquires 80% of Subsidiary Co. for

      ₹16,00,000 when Subsidiary’s net assets are ₹15,00,000. At acquisition, the fair value of minority interest equals its proportionate share of net assets. Calculate goodwill and minority interest.
      A Goodwill ₹1,00,000; MI ₹3,00,000 Correct Answer Incorrect Answer
      B Goodwill ₹4,00,000; MI ₹3,00,000 Correct Answer Incorrect Answer
      C Goodwill ₹4,00,000; MI ₹4,00,000 Correct Answer Incorrect Answer
      D Goodwill ₹1,00,000; MI ₹4,00,000 Correct Answer Incorrect Answer
      E None Correct Answer Incorrect Answer

      Solution

      • MI = 20% × ₹15,00,000 = ₹3,00,000. • Total consideration + MI = ₹16,00,000 + ₹3,00,000 = ₹19,00,000. • Goodwill = 19,00,000 – ₹15,00,000 = ₹4,00,000.

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