Plumber Corporation acquired all of Socket Corporations voting shares on January 1, 20X2, for $470,000. At that
Question:
Plumber Corporation acquired all of Socket Corporation’s voting shares on January 1, 20X2, for $470,000. At that time, Socket reported common stock outstanding of $80,000 and retained earnings of $130,000. The book values of Socket’s assets and liabilities approximated fair values, except for land, which had a book value of $80,000 and a fair value of $100,000, and buildings, which had a book value of $220,000 and a fair value of $400,000. Land and buildings are the only noncurrent assets that Socket holds.
Required
a. Compute the amount of goodwill at the date of acquisition.
b. Give the consolidation entry or entries required immediately following the acquisition to prepare a consolidated balance sheet
Step by Step Answer:
Advanced Financial Accounting
ISBN: 9781260772135
13th Edition
Authors: Theodore Christensen, David Cottrell, Cassy Budd