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On May 31, 2001, Cole Co paid $3,500,000 to acquire all of the common stock of Hale Corporation, which became a division of Armstrong. Hale
On May 31, 2001, Cole Co paid $3,500,000 to acquire all of the common stock of Hale Corporation, which became a division of Armstrong. Hale reported the following balance sheet at the time of the acquisition: Current assets $900,000 Noncurrent assets 2,700,000 Total assets $3,600,000 Current liabilities $600,000 Long-term liabilities 500,000 Stockholder's equity 2,500,000 Total liabilities and S/E $3,600,000 It was determined at the date of purchase that the fair value of the total assets of Hall was $3,900,000. Compute the amount of goodwill recognized if any on May 31, 2001. My answer: $3,500,000 - $3,900,000 = -$400,000 So goodwill is not recognized? Would there be a disclosure to the financial statements? Or just that goodwill is not recognized
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