19) Wilkins Inc. acquired 100% of the voting common stock of Granger Inc. on January 1, 2021. The book value and fair value of Granger's accounts on that date (prior to creating the combination) are as follows, along with the book value of Wilkins's accounts: Wilkins Book Value Granger Book Value Granger Fair Value Retained earnings, 1/1/21 $ 250,000 $ 240,000 Cash and receivables 170,000 70,000 S 70,000 Inventory 230,000 180,000 210,000 Land 320,000 220,000 240,000 Buildings (net) 480,000 240,000 280,000 Equipment (net) 120,000 90,000 90,000 Liabilities 650,000 440,000 430,000 Common stock 360,000 80,000 Additional paid-in capital 60,000 40,000 Assume that Wilkins paid a total of $500,000 in cash for all of the shares of Granger. In addition, Wilkins paid $42,000 for secretarial and management time allocated to the acquisition transaction. What will be the balance in consolidated goodwill? A) $0. B) $20,000. C) $40,000. D) $42,000. E) $82,000.
19) Wilkins Inc. acquired 100% of the voting common stock of Granger Inc. on January 1, 2021. The book value and fair value of Granger's accounts on that date (prior to creating the combination) are as follows, along with the book value of Wilkins's accounts: Wilkins Book Value Granger Book Value Granger Fair Value Retained earnings, 1/1/21 $ 250,000 $ 240,000 Cash and receivables 170,000 70,000 S 70,000 Inventory 230,000 180,000 210,000 Land 320,000 220,000 240,000 Buildings (net) 480,000 240,000 280,000 Equipment (net) 120,000 90,000 90,000 Liabilities 650,000 440,000 430,000 Common stock 360,000 80,000 Additional paid-in capital 60,000 40,000 Assume that Wilkins paid a total of $500,000 in cash for all of the shares of Granger. In addition, Wilkins paid $42,000 for secretarial and management time allocated to the acquisition transaction. What will be the balance in consolidated goodwill? A) $0. B) $20,000. C) $40,000. D) $42,000. E) $82,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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give answer and provide Explanation correct and incorrect option
Transcribed Image Text:19)
Wilkins Inc. acquired 100% of the voting common stock of Granger Inc. on January 1,
2021. The book value and fair value of Granger's accounts on that date (prior to creating the
combination) are as follows, along with the book value of Wilkins's accounts:
Wilkins
Book Value
Granger
Book Value
Granger
Fair Value
Retained earnings, 1/1/21
$ 250,000
$ 240,000
Cash and receivables
170,000
70,000
$ 70,000
Inventory
230,000
180,000
210,000
Land
320,000
220,000
240,000
Buildings (net)
480,000
240,000 280,000
Equipment (net)
120,000
90,000
90,000
Liabilities
650,000
440,000
430,000
Common stock
360,000
80,000
Additional paid-in capital
60,000
40,000
Assume that Wilkins paid a total of $500,000 in cash for all of the shares of Granger. In addition,
Wilkins paid $42,000 for secretarial and management time allocated to the acquisition
transaction. What will be the balance in consolidated goodwill?
A) $0.
B)
$20,000.
C) $40,000.
D) $42,000.
E) $82,000.
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