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One of the members in the alliance resigned, namely Nicki. Nicki's ownership in profit and loss is 25%. From his resignation, Nicki was paid $80 million to settle his holdings. The partners' total equity before the recognition of goodwill on Nicki's exit was $300 million. However, when Nicki left, the remaining partners' capital, excluding his share in goodwill, totaled $280 million. So how much goodwill does the company approve?

One of the members in the alliance resigned, namely Nicki. Nicki's ownership in profit and loss is 25%. From his resignation, Nicki was paid $80 million to settle his holdings. The partners' total equity before the recognition of goodwill on Nicki's exit was $300 million. However, when Nicki left, the remaining partners' capital, excluding his share in goodwill, totaled $280 million. So how much goodwill does the company approve?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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One of the members in the alliance resigned, namely Nicki. Nicki's ownership in profit and loss is 25%. From his resignation, Nicki was paid $80 million to settle his holdings. The partners' total equity before the recognition of goodwill on Nicki's exit was $300 million. However, when Nicki left, the remaining partners' capital, excluding his share in goodwill, totaled $280 million. So how much goodwill does the company approve?
Transcribed Image Text:One of the members in the alliance resigned, namely Nicki. Nicki's ownership in profit and loss is 25%. From his resignation, Nicki was paid $80 million to settle his holdings. The partners' total equity before the recognition of goodwill on Nicki's exit was $300 million. However, when Nicki left, the remaining partners' capital, excluding his share in goodwill, totaled $280 million. So how much goodwill does the company approve?
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