On January 1, 2011, Pat Corporation paid $400,000 for purchase of Sad Corporation, when Sad's stockholders' equity consisted of $300,000 capital stock and $200,000 retained earnings. Book values were equal to fair values of Sad's assets and liabilities, except for a building and land. The building had a book value of $80,000, a fair value of $120,000, and a remaining useful life of eight years. The land had a book value of $50,000 and a fair value of $150,000. Required : Calculate goodwill at the date of purchase of Sad Corporation. Goodwill calculation Consideration : Asset Goodwill
On January 1, 2011, Pat Corporation paid $400,000 for purchase of Sad Corporation, when Sad's stockholders' equity consisted of $300,000 capital stock and $200,000 retained earnings. Book values were equal to fair values of Sad's assets and liabilities, except for a building and land. The building had a book value of $80,000, a fair value of $120,000, and a remaining useful life of eight years. The land had a book value of $50,000 and a fair value of $150,000. Required : Calculate goodwill at the date of purchase of Sad Corporation. Goodwill calculation Consideration : Asset Goodwill
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On January 1, 2011, Pat Corporation paid $400,000 for purchase of Sad Corporation, when Sad's
were equal to fair values of Sad's assets and liabilities, except for a building and land. The building
had a book value of $80,000, a fair value of $120,000, and a remaining useful life of eight years. The
land had a book value of $50,000 and a fair value of $150.000.
Required : Calculate
Transcribed Image Text:On January 1, 2011, Pat Corporation paid $400,000 for purchase of Sad Corporation, when Sad's
stockholders' equity consisted of $300,000 capital stock and $200,000 retained earnings. Book values
were equal to fair values of Sad's assets and liabilities, except for a building and land. The building
had a book value of $80,000, a fair value of $120,000, and a remaining useful life of eight years. The
land had a book value of $50,000 and a fair value of $150,000.
Required : Calculate goodwill at the date of purchase of Sad Corporation.
Goodwill calculation
Consideration :
Asset
Goodwvill
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education