On July 1, 2022 an investor paid $3.330,000 for 100% of the voting common stock of an investee. The transaction qualifies as a business combination. At that time, investee had the following summarized balance sheet information: July 1, 2022 $450.000 Current assets Plant and equipment, net 2,520,000 Liabilities Equity 1.260.000 1.710.000 On July 1, 2022, the fair value of the plant and equipment was $630,000 more than its carrying amount. The acquisition-date fair values approximated their recorded book values for all of the remaining individual net assets of the investee. Related to this transaction, what amount of goodwill must the investor report in its post-acquisition consolidated balance sheet on July 1, 20227 C$630,000 C$1,620,000 O$990,000 C$2,250,000
On July 1, 2022 an investor paid $3.330,000 for 100% of the voting common stock of an investee. The transaction qualifies as a business combination. At that time, investee had the following summarized balance sheet information: July 1, 2022 $450.000 Current assets Plant and equipment, net 2,520,000 Liabilities Equity 1.260.000 1.710.000 On July 1, 2022, the fair value of the plant and equipment was $630,000 more than its carrying amount. The acquisition-date fair values approximated their recorded book values for all of the remaining individual net assets of the investee. Related to this transaction, what amount of goodwill must the investor report in its post-acquisition consolidated balance sheet on July 1, 20227 C$630,000 C$1,620,000 O$990,000 C$2,250,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Computing
the amount of goodwill in an acquisition
On July 1, 2022 an investor paid $3,330,000 for 100% of the voting common stock of an investee. The transaction qualifies as a business combination. At that time, investee had the following
summarized balance sheet information:
July 1, 2022
$450,000
Current assets
Plant and equipment, net 2,520,000
Liabilities
1.260,000
Equity
1,710,000
On July 1, 2022, the fair value of the plant and equipment was $630,000 more than its carrying amount. The acquisition-date fair values approximated their recorded book values for all of the
remaining individual net assets of the investee. Related to this transaction, what amount of goodwill must the investor report in its post-acquisition consolidated balance sheet on July 1, 20227
$630,000
O$1,620,000
O$990,000
O$2,250,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F567e5c76-a71a-4e3b-b67f-acaa9766611e%2F124e2c80-8195-45df-8dc6-cdca3d5d3fb8%2F7sbcxdf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Computing
the amount of goodwill in an acquisition
On July 1, 2022 an investor paid $3,330,000 for 100% of the voting common stock of an investee. The transaction qualifies as a business combination. At that time, investee had the following
summarized balance sheet information:
July 1, 2022
$450,000
Current assets
Plant and equipment, net 2,520,000
Liabilities
1.260,000
Equity
1,710,000
On July 1, 2022, the fair value of the plant and equipment was $630,000 more than its carrying amount. The acquisition-date fair values approximated their recorded book values for all of the
remaining individual net assets of the investee. Related to this transaction, what amount of goodwill must the investor report in its post-acquisition consolidated balance sheet on July 1, 20227
$630,000
O$1,620,000
O$990,000
O$2,250,000
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