1. **Stating the problem:** Calculate the goodwill arising on acquisition of Seek by Hide on 1 April 20X6. 2. **Formula for goodwill:** $$\text{Goodwill} = \text{Fair value of consideration transferred} + \text{Fair value of non-controlling interest (NCI)} - \text{Fair value of net assets acquired}$$ 3. **Given data:** - Hide acquired 3 million shares out of 4 million total shares of Seek. - Price paid per share = 8 - Retained earnings at 1 July 20X5 = 9.5 million - Fair value adjustment for land and buildings = 2 million - Fair value of NCI per share at acquisition = 4 4. **Calculate fair value of consideration paid by Hide:** $$\text{Cash paid} = 3,000,000 \times 8 = 24,000,000$$ 5. **Calculate fair value of NCI:** NCI shares = 4,000,000 - 3,000,000 = 1,000,000 shares $$\text{Fair value of NCI} = 1,000,000 \times 4 = 4,000,000$$ 6. **Calculate fair value of net assets at acquisition:** - Share capital = 4,000,000 shares \times $1 = 4,000,000$ - Retained earnings = 9,500,000 - Fair value adjustment = 2,000,000 $$\text{Fair value of net assets} = 4,000,000 + 9,500,000 + 2,000,000 = 15,500,000$$ 7. **Calculate goodwill:** $$\text{Goodwill} = 24,000,000 + 4,000,000 - 15,500,000 = 12,500,000$$ **Final answer:** $$\boxed{12,500,000}$$ Goodwill arising on acquisition is 12,500,000.