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P Company acquired 90 percent of the voting stock of S Company on January 1, 20X2, for $837,000. The after 1/1/20X2. • On 1/1/20X2, S Company had total shareholder equity of $650,000.

P Company acquired 90 percent of the voting stock of S Company on January 1, 20X2, for $837,000. The after 1/1/20X2. • On 1/1/20X2, S Company had total shareholder equity of $650,000.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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QUESTION 4 P Company acquired 90 percent of the voting stock of S Company on January 1, 20X2, for $837,000. The fair value of the noncontrolling interest on 1/1/20X2 was $81,000. This was based on stock trades immediately before and after 1/1/20X2. • On 1/1/20X2, S Company had total shareholder equity of $650,000. • S Company owned a patent on 1/1/20X2 that was not on its balance sheet. The patent was worth $50,000 and had a 10-year remaining This content is copyrighted. A. How much goodwill is recognized as a result of this acquisition? B. How much of the goodwill in question A is attributable to P Company?
Transcribed Image Text:QUESTION 4 P Company acquired 90 percent of the voting stock of S Company on January 1, 20X2, for $837,000. The fair value of the noncontrolling interest on 1/1/20X2 was $81,000. This was based on stock trades immediately before and after 1/1/20X2. • On 1/1/20X2, S Company had total shareholder equity of $650,000. • S Company owned a patent on 1/1/20X2 that was not on its balance sheet. The patent was worth $50,000 and had a 10-year remaining This content is copyrighted. A. How much goodwill is recognized as a result of this acquisition? B. How much of the goodwill in question A is attributable to P Company?
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