What is the amount of purchased goodwill? At the start of the current year, Spotify Corp. purchased 25% ofSkyline Technologies Inc. for $50 million. At the time of purchase,the carrying value of Skyline Technologies' net assets was $80million. The fair value of Skyline Technologies' depreciable assetswas $20 million in excess of their book value.For this year, Skyline Technologies reported a net income of $72million and declared and paid $18 million in dividends.What is the amount of purchased goodwill?

Explanation of Goodwill: Goodwill represents the premium paid when acquiring a business or interest…

Answered: At the start of the current year,…

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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At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $51 million. At the time of purchase, the carrying value of Sky Tech's net assets was $80 million. The fair value of Sky Tech's depreciable assets was $20 million in excess of their book value. For this yeat, Sky Tech reported a net income of $80 million and declared and paid S20 million in dividends. The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is: Multiple Choice $6.0 million. $20 million. $30 million. None of these answer choices are correct.
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