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    Question

    Company Y acquires 80% of Z for consideration

    ₹4,00,000. Fair value of identifiable net assets of Z = ₹3,50,000. Calculate goodwill on consolidation.
    A ₹50,000 Correct Answer Incorrect Answer
    B ₹1,00,000 Correct Answer Incorrect Answer
    C ₹80,000 Correct Answer Incorrect Answer
    D ₹4,00,000 Correct Answer Incorrect Answer

    Solution

    Goodwill (partial method) = Consideration Transferred − (Acquirer's Share of Fair Value of Identifiable Net Assets) = 4,00,000 − (80% × 3,50,000) = 4,00,000 − 2,80,000 = ₹1,20,000.

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