Consider the purchase of a supplier by Canadian Tire. 1. Suppose the fair value of the net

Question:

Consider the purchase of a supplier by Canadian Tire.
1. Suppose the fair value of the net assets at the date of purchase (February 1, 2014) had been $180.3 million. What would the cost have been if Canadian Tire had paid $200 million?
2. Explain how Canadian Tire will have been accounting for this up to February 1, 2016.
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...