Can you please answer the general accounting question? Amie, Inc., has 100,000 shares of $2 par value stock outstanding.Prairie Corporation acquired 30,000 of Amies shares on January1, 2009, for $120,000 when Amie s net asset had a total fair valueof $350,000. On July 1, 2012, Prairie agreed to buy an additional60,000 shares of Amie from a single stockholders for $6 per share.Although Amie s shares were selling in the $5 range around July1, 2012, Prairie forecasted that obtaining control for Amie wouldproduce significant revenue synergies to justify the premiumprice paid. If Amie s net identifiable assets had a fair value of$500,000 at July 1, 2012, how much goodwill should Prairie reportin its post combination consolidated balance sheet?a. $60,000b. $90,000c. $100,000d. $-0-

Step 1: Define GoodwillWhen a company acquires another company and pays a higher amount than its…

Answered: Amie, Inc., has 100,000 shares of $2…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

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Amie, Inc., has 153,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 45,900 of Amie’s shares on January 1, 2018, for $183,600 when Amie’s net assets had a total fair value of $560,600. On July 1, 2021, Prairie bought an additional 91,800 shares of Amie from a single stockholder for $6 per share. Although Amie’s shares were selling in the $5 range around July 1, 2021, Prairie forecasted that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie’s identifiable net assets had a fair value of $775,800 at July 1, 2021, how much goodwill should Prairie report in its postcombination consolidated balance sheet?
On January 1, 2015, Port Company acquires 8,000 shares of Solvo Company by issuing 10,000 of its common stock shares with a par value of $10 per share and a fair value of $70 per share. The price paid reflects a control premium. The market value of the shares owned by the NCI is $80 per share. At the time of the purchase, Solvo has the following balance sheet:Appraisals indicate that book values are representative of fair values with the exception of the land and building. The land has a fair value of $180,000, and the building is appraised at $450,000. The building has an estimated remaining life of 20 years. Any remaining excess is goodwill.The following summary of Solvo’s retained earnings applies to 2015 and 2016:Balance, January 1, 2015. . . . . . . . . . . . . . . . . . . $250,000Net income for 2015. . . . . . . . . . . . . . . . . . . . . 60,000Dividends paid in 2015. . . . . . . . . . . . . . . . . . . (10,000)Balance, December 31, 2015 . . . . . . . . . . . . . . . $300,000Net…
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