Compute the amount of goodwill-bargain purchase

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Reference no: EM132851068

Problem - Public Berhad acquired 70% equity shares of Queen Berhad as on 31st May 2018 at a cost of RM700,000. The following information is available from statement of financial position of Queen Berhad as on 31st May 2018.

Accounts

RM'000

Non-current assets

1,200

Investments

550

Current assets

700

10% debentures

900

Current liabilities

500

The following revaluations have been agreed upon (not included in the above figures):

Non-current assets

Up by 20%

Investments

Down by 10%

Queen Berhad declared and paid dividend at 20% on its equity shares as on 31st May 2018. Public Berhad purchased the shares at RM2 per unit.

Required - Compute the amount of goodwill / bargain purchase attributable to the acquisition of shares in Queen Berhad.

Reference no: EM132851068

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