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.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 24E
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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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa53a9a99-75b6-411c-b6db-7002448aaf26%2Fe08fc241-db24-4df7-b9bf-5a984d8c884b%2Fm7t3yzw_processed.jpeg&w=3840&q=75)
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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