Amie, Inc. has 100,000 shares of $2 par value stock outstanding Prairie Corporation acquired 30,000 of Amie's shares on January 1, 2012, for $120,000 when Amie's net assets had a total fair value of $350,000. On July 1, 2015, Prairie bought an additional 60,000 shares of Amie from a single stockholder for $6 per share. Although Amie's shares were selling in the $5 range around July 1, 2015, Prairie forecast that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie's net identifiable assets had a fair market value of $500,000 at July 1, 2015, how much goodwill should Prairie report in its post-combination consolidated balance sheet? A) $60,000 B) $90,000 C) $100,000 D) $0

Amie, Inc. has 100,000 shares of $2 par value stock outstanding Prairie Corporation acquired 30,000 of Amie's shares on January 1, 2012, for $120,000 when Amie's net assets had a total fair value of $350,000. On July 1, 2015, Prairie bought an additional 60,000 shares of Amie from a single stockholder for $6 per share. Although Amie's shares were selling in the $5 range around July 1, 2015, Prairie forecast that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie's net identifiable assets had a fair market value of $500,000 at July 1, 2015, how much goodwill should Prairie report in its post-combination consolidated balance sheet? A) $60,000 B) $90,000 C) $100,000 D) $0

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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