Pasta acquired 100% of Sauce for $200. At acquisition date Sauce had equity of $170, comprised as follows: Capital 100 Asset revaluation reserve20 Retained earnings 50 Equity 170 The book value of net assets was considered to be close to fair value,except for the following: CostCarrying amountFair value Intangibles0030 The tax rate is 30%. What is the amount of goodwill acquired by Pasta?

Goodwill refers to the intangible asset that arises generally at the time of purcahse or sale of…

Answered: Pasta acquired 100% of Sauce for $200.…

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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Pasta acquired 100% of Sauce for $200.
At acquisition date Sauce had equity of $170, comprised as follows:

Capital		100
Asset revaluation reserve	20
Retained earnings		50
Equity		170
The book value of net assets was considered to be close to fair value,
except for the following:
	Cost	Carrying amount	Fair value
Intangibles	0	0	30
The tax rate is 30%.

What is the amount of goodwill acquired by Pasta?

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