Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sun Limited bought the business of Moon Limited for $600,000. Two-thirds was paid immediately and the balance was to be paid in two years later.

Sun Limited bought the business of Moon Limited for $600,000. Two-thirds was paid immediately and the balance was to be paid in two years later. The relevant discount rate is 12%.

The assets taken over by the company had a fair value of $700,000 and the liabilties taken over had a fair value of $250,000.

The goodwill acquired by Sun Limited is?

Select one:

a.Positive Goodwill $109,439

b.Positive goodwill of $150,000

c.Negative Goodwill $50,000

d.Negative Goodwill of $150,000

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_2

Step: 3

blur-text-image_3

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

Financial Accounting and Reporting

Authors: Barry Elliott, Jamie Elliott

18th edition

1292162406, 978-1292162409

More Books

Students also viewed these Accounting questions