Measurement of Goodwill A parent has purchased a 100% interest in a subsidiary for $30,000. On the acquisition date, the subsidiary’s reported net assets have a pre-acquisition book value of $21,000 and the subsidiary’s identifiable net assets have a fair value of $24,000. Required a. How much Goodwill, if any, will the parent record in this acquisition? $Answer b. Now, assume the subsidiary’s reported net assets have a pre-acquisition book value of $25,500 and the subsidiary’s identifiable net assets have a fair value of $33,000. How do you account for this new value? The equity investment balance will be reported in the amount of $Answer. The parent will recognize $Answe as a gain or loss
Measurement of
A parent has purchased a 100% interest in a subsidiary for $30,000. On the acquisition date, the subsidiary’s reported net assets have a pre-acquisition book value of $21,000 and the subsidiary’s identifiable net assets have a fair value of $24,000.
Required
a. How much Goodwill, if any, will the parent record in this acquisition? $Answer
b. Now, assume the subsidiary’s reported net assets have a pre-acquisition book value of $25,500 and the subsidiary’s identifiable net assets have a fair value of $33,000. How do you account for this new value?
The equity investment balance will be reported in the amount of $Answer.
The parent will recognize $Answe as a gain or loss
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