Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Amie, Inc., has 100,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 30,000 of Amies shares on January 1, 2012, for $120,000 when

Amie, Inc., has 100,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 30,000 of Amies shares on January 1, 2012, for $120,000 when Amies net assets had a total fair value of $350,000. On July 1, 2015, Prairie bought an additional 60,000 shares of Amie from a single stockholder for $6 per share. Although Amies shares were selling in the $5 range around July 1, 2015, Prairie forecasted that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amies net identifiable assets had a fair value of $500,000 at July 1, 2015, how much goodwill should Prairie report in its postcombination consolidated balance sheet?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing At The Speed Of Risk With An Agile Continuous Audit Plan

Authors: Norman Marks

1st Edition

B09PMBSWSC, 979-8787044393

More Books

Students also viewed these Accounting questions

Question

b. What groups were most represented? Why do you think this is so?

Answered: 1 week ago