Ute Co. had the following transactions with its 90% owned subsidiary (Cougar) during 20X1: Purchases of inventory materials totaling $755,000 from Cougar Corp. Cougar’s gross profit on the sale was 40%. Ute had $80,000 of this inventory remaining on December 31, 20X1. Before consolidating entries, Ute had consolidated inventory of $805,000.

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A: Calculation of Goodwill :        An explanation is given below in step 2 :

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Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.