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Fillington Inc

question 11

Essay

Fillington Inc. acquired a 75% shareholding in Donhenry Ltd. for $20 million. Book value of net identifiable assets of Donhenry is $14 million. The fair value of Donhenry's asset is the same as their book value except accounts receivables, which are impaired by $1 million. Book value of assets is $54 million while book value of liabilities is $40 million. The NCI has been valued at $5 million. The tax rate is 30%.
Required:
Calculate goodwill using the full goodwill method.


Definitions:

Cash Flow Per Share

A measure indicating the amount of cash flow generated by a company on a per-share basis, useful for assessing financial performance and liquidity.

GAAP

A set of widely adhered-to accounting norms and guidelines for financial statements.

EPS Information

Earnings Per Share; a financial metric that represents the portion of a company's profit allocated to each outstanding share of common stock.

Operating Activities

The portion of a company's cash flow statement that details the cash generated or used in the company's primary business operations, excluding investing and financing activities.

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