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The following information relates to questions 26 and 27
On 1 July 2012 Yamba Ltd acquired a 60% interest in Zombi Ltd for $42,000. At that date the net assets of Zombi comprised $30,000 share capital and $23,000 retained earnings. All assets were recorded at their fair values, with the exception of an item of land, whose carrying amount was $10,000 less than its fair value.
On 1 July 2013 Xtreme Ltd acquired a 50% interest in Yamba Ltd for $65,000.
At that date the net assets of Yamba Ltd comprised $50,000 share capital and $60,000 retained earnings. All assets were recorded at their fair values, with the exception of Yamba Ltd's investment in Zombi Ltd, which had a fair value of $54,000.
During the twelve months to 30 June 2013 the retained earnings of Zombi Ltd had increased to $30,000. In addition the fair value of the land had increased by a further $10,000.
The Xtreme Group accounts for goodwill under the partial method.
-The total goodwill in the Xtreme Group at 30 June 2013 is:
Negotiation Costs
Expenses or efforts involved in conducting negotiations, often pertaining to transactions, agreements, or resolving disputes.
Car Dealer
A business that sells new or used automobiles to consumers.
Cashier's Check
A check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier.
Non-Strategic View
An approach or perspective that does not involve long-term planning or consider the competitive positioning within a particular industry or market.
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