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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Transcribed Image Text: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.
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