Question - Harry purchases 80% of David by paying $50 a share for 40,000 of David. The remaining 10,000 shares of David are held by minority shareholders and are worth $40 per share both before and after the acquisition. Assume that 100% of the FVNAA of David at date of acquisition is $2,200,000.
a. Calculate goodwill.
b. How much goodwill is allocated to the controlling interest and how much to the non-controlling interest?