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Amie, Inc., has 110,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 33,000 of Amie's shares on January 1, 2015, for $132,000 when

Amie, Inc., has 110,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 33,000 of Amie's shares on January 1, 2015, for $132,000 when Amie's net assets had a total fair value of $375,850. On July 1, 2018, Prairie bought an additional 66,000 shares of Amie from a single stockholder for $6 per share. Although Amie's shares were selling in the $5 range around July 1, 2018, Prairie forecasted that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie's identifiable net assets had a fair value of $546,250 at July 1, 2018, how much goodwill should Prairie report in its postcombination consolidated balance sheet?

Multiple Choice

  • $113,750.
  • $69,750.
  • $0
  • $55,000.

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