Alpha Corp acquired 40% of Beta Inc. for $75 million on January 1, 2024. At the acquisition date, Beta's net assets had a book value of $120 million. The fair value of Beta's identifiable assets exceeded their book value by $25 million. During 2024, Beta reported net income of $40 million and paid dividends of $15 million. Calculate the amount of goodwill from this acquisition.

Alpha Corp acquired 40% of Beta Inc. for $75 million on January 1, 2024. At the acquisition date, Beta's net assets had a book value of $120 million. The fair value of Beta's identifiable assets exceeded their book value by $25 million. During 2024, Beta reported net income of $40 million and paid dividends of $15 million. Calculate the amount of goodwill from this acquisition.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 37RQSC

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