9 On January 2, Year 1 Parent Company paid $1,200,000 for 100% of the voting common stock of Sub Corp. At the time of the investment, Sub Corp had netassets with a book value of $800,000 and fair value of $1,000,000. The fair value increase is attributable to the building and will be amortized over 10years. During year 1, Sub earned net income of $100,000 and paid dividends of $20,000. Any excess cost over fair value is attributable to goodwill with anindefinite life. What is the amount of goodwill from Parent's investment in Sub?4O$200,000O$400,000O $1,200,000O $20,000

Goodwill : Goodwill is an intangible asset which arises when another company acquires a new…

ahy paid $1,200,000 for 100% of the voting common stock of Sub Corp. At the sets with a book value of $800,000 and fair value of $1,000,000. The fair value increase is attributable to the bui ars. During year 1. Sub earned net income of $100,000 and paid dividends of $20,000. Any excess cost over fa efinite life. What is the amount of goodwill from Parent's investment in Sub?

ahy paid $1,200,000 for 100% of the voting common stock of Sub Corp. At the sets with a book value of $800,000 and fair value of $1,000,000. The fair value increase is attributable to the bui ars. During year 1. Sub earned net income of $100,000 and paid dividends of $20,000. Any excess cost over fa efinite life. What is the amount of goodwill from Parent's investment in Sub?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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