Question
Consider companies with the pre-acquisition balance sheets presented below. Investor Company purchases 100% of Investee Companys stock by issuing new common stock. The market value
Consider companies with the pre-acquisition balance sheets presented below. Investor Company purchases 100% of Investee Companys stock by issuing new common stock. The market value of the stock was $100,000. Complete the columns for Investors post-acquisition balance sheet and the Consolidated Company post-acquisition balance sheet. The
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| Pre-acquisition balance sheets | Post-acquisition balance sheets | ||
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| Investor Company | Investee Company(Fair Market Value | Investor Company (Equity Method) | Consolidated Company |
| Current Assets | $41,000 | $33,000 |
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| Investment |
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| Other Assets | 202,000 | 54,000 |
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| Goodwill |
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| Total Assets | $243,000 | $87,000 |
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| Liabilities | $95,000 | $29,000 |
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| Common Stock | 70,000 | 32,000 |
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| Retained Earnings | 78,000 | 26,000 |
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| Total Liabilities and Equity | $243,000 | $87,000 |
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Provide the calculation for the goodwill here:
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Auditing And Assurance Services
Authors: Louwers, Timothy Louwers
5th Edition
0078025443, 978-0078025440
