On January 1, 20X9, Pirate Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash. The fair value of the noncontrolling interest at that date was determined to be $40,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:     Pirate Corp. Sea-Gull Corp. Cash   $ 60,000       $ 20,000     Accounts Receivable     80,000         30,000     Inventory     90,000         40,000     Land     100,000         40,000     Buildings and Equipment     200,000         150,000     Less: Accumulated Depreciation     (80,000 )       (50,000 )   Investment in Sea-Gull Corp.     160,000               Total Assets   $ 610,000       $ 230,000                           Accounts Payable   $ 110,000       $ 30,000     Bonds Payable     95,000         40,000     Common Stock     200,000         40,000     Retained Earnings     205,000         120,000     Total Liabilities and Equity   $ 610,000       $ 230,000     At the date of the business combination, the book values of Sea-Gull's net assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and land, which had a fair value of $60,000. Based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet prepared immediately after the business combination?     $0     $15,000     $40,000     $20,000

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QUESTION 18

  1. On January 1, 20X9, Pirate Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash. The fair value of the noncontrolling interest at that date was determined to be $40,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
     

      Pirate Corp. Sea-Gull Corp.
    Cash   $ 60,000       $ 20,000    
    Accounts Receivable     80,000         30,000    
    Inventory     90,000         40,000    
    Land     100,000         40,000    
    Buildings and Equipment     200,000         150,000    
    Less: Accumulated Depreciation     (80,000 )       (50,000 )  
    Investment in Sea-Gull Corp.     160,000              
    Total Assets   $ 610,000       $ 230,000    
                         
    Accounts Payable   $ 110,000       $ 30,000    
    Bonds Payable     95,000         40,000    
    Common Stock     200,000         40,000    
    Retained Earnings     205,000         120,000    
    Total Liabilities and Equity   $ 610,000       $ 230,000    

    At the date of the business combination, the book values of Sea-Gull's net assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and land, which had a fair value of $60,000.


    Based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet prepared immediately after the business combination?
       
    $0
       
    $15,000
       
    $40,000
       
    $20,000
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