As of December 31, 20X4, Blue Co.’s statement of financial position shows the book values of $15,000,000 for total assets and $12,000,000 for total liabilities. Also on December 31, 20X4, an appraisal shows the fair values of $18,500,000 for total assets and $14,000,000 for total liabilities. Green Co. purchased all of the net assets of Blue Co. on December 31, 20X4 for $5,500,000. What amount of goodwill, if any, did Green Co. record on the acquisition date?   a. $2,500,000   b. $1,000,000   c. $4,500,000   d. $0

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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As of December 31, 20X4, Blue Co.’s statement of financial position shows the book values of $15,000,000 for total assets and $12,000,000 for total liabilities. Also on December 31, 20X4, an appraisal shows the fair values of $18,500,000 for total assets and $14,000,000 for total liabilities. Green Co. purchased all of the net assets of Blue Co. on December 31, 20X4 for $5,500,000. What amount of goodwill, if any, did Green Co. record on the acquisition date?

  •   a. $2,500,000
  •   b. $1,000,000
  •   c. $4,500,000
  •   d. $0
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