On January 1, 20x, Gold Rush Company acquires 80 percent ownership in California Corporation for 200,000. The fair value of the non-controlling interest at that time is determined to be 50,000. It reports net assets with a book value of 200,000 and fair value of 230,000. Gold Rush Company reports net assets with a book value of 600,000 and a fair value of 650,000 at that time, excluding its investments in California. What will be the amount of goodwill that would be reported immediately after the combination under current accounting practice if the option of full-goodwill method is used?
On January 1, 20x, Gold Rush Company acquires 80 percent ownership in California Corporation for 200,000. The fair value of the non-controlling interest at that time is determined to be 50,000. It reports net assets with a book value of 200,000 and fair value of 230,000. Gold Rush Company reports net assets with a book value of 600,000 and a fair value of 650,000 at that time, excluding its investments in California. What will be the amount of goodwill that would be reported immediately after the combination under current accounting practice if the option of full-goodwill method is used?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On January 1, 20x6, Gold Rush Company acquires 80 percent ownership in California
Corporation for 200,000. The fair value of the non-controlling interest at that time is
determined to be 50,000.
It reports net assets with a book value of 200,000 and fair value of 230,000. Gold Rush
Company reports net assets with a book value of 600,000 and a fair value of 650,000 at
that time, excluding its investments in California. What will be the amount of goodwill that
would be reported immediately after the combination under current accounting practice if
the option of full-goodwill method is used?
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