Goodwill and Non-controlling Interests

Gosh Ltd acquired 65% of the ordinary shares of Maron Ltd on 1 October 2021 when the issued share capital of Maron Ltd was £3 million and its retained earnings £1 million. The consideration is as follows:

• the issue of one million ordinary £1 shares in Gosh Ltd at market value £2.25;
• a cash payment of £450,000 on 1 October 2023.

Gosh Ltd can borrow funds at 12%.

The non-controlling interests in the net assets of Maron Ltd as at 1 October 2021 is valued at £1,750,000.

Solutions.

Journal entry to record purchase consideration: