Range Ltd acquired a business for the following consideration: Cash $50 000 Land—Carrying amount $90 000 Fair value $150 000 Shares in Range Ltd—Fair value $60 000 (Hint: it is the fair value of the consideration that is relevant) The business being acquired had the following assets and liabilities as reported in the balance sheet (there were no contingent liabilities): Liabilities Bank loan $50 000 Creditors $30 000 Assets Plant and equipment $150 000 Motor vehicle $30 000 (the plant and equipment and motor vehicle have fair value of $170 000 and $30 000, respectively) HOW MUCH GOODWILL WAS ACQUIRED?
Range Ltd acquired a business for the following consideration: Cash $50 000 Land—Carrying amount $90 000 Fair value $150 000 Shares in Range Ltd—Fair value $60 000 (Hint: it is the fair value of the consideration that is relevant) The business being acquired had the following assets and liabilities as reported in the balance sheet (there were no contingent liabilities): Liabilities Bank loan $50 000 Creditors $30 000 Assets Plant and equipment $150 000 Motor vehicle $30 000 (the plant and equipment and motor vehicle have fair value of $170 000 and $30 000, respectively) HOW MUCH GOODWILL WAS ACQUIRED?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
Range Ltd acquired a business for the following consideration:
- Cash $50 000
- Land—Carrying amount $90 000
Fair value $150 000
- Shares in Range Ltd—Fair value $60 000
(Hint: it is the fair value of the consideration that is relevant)
The business being acquired had the following assets and liabilities as reported in the
Liabilities
- Bank loan $50 000
- Creditors $30 000
Assets
- Plant and equipment $150 000
- Motor vehicle $30 000
- (the plant and equipment and motor vehicle have fair value of $170 000 and $30 000, respectively)
HOW MUCH
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education