Earth Ltd Acquired Moon Plc on 1 July 2013 for the Sum

Earth Ltd acquired Moon Plc on 1 July 2013 for the sum of £100 000.On the same date Moon Plc has the following assets and liabilities: $$\begin{array} { | l | r | r | r | } \hline & \text { Carrying amount } & \text { Recoverable amount } & \text { Fair value } \\\hline \text { Assets: } & & & \\\hline \text { Land } & 100000 & 130000 & 150000 \\\hline \text { Machinery } & 50000 & 30000 & 40000 \\\hline \text { Cash } & 20000 & & \\\hline \text { Liabilities: } & & & \\\hline \text { Loan } & 105000 & & \\\hline \text { Contingent liabilities } & 80000 & & \\\hline\end{array}$$ What is the value of goodwill,if any?

A) They are not required to recognise goodwill.
B) £35 000
C) £75 000
D) surplus of £5000

Correct Answer:

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