Share
Explore BrainMass

Perch Co and Float Corp, goodwill non-controlling net assets

Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair value of Float's net assets was $1,850,000, and the book value was $1,500,000. The non-controlling interest shares of Float Corp. are not actively traded.

What amount of goodwill should be attributed to Perch at the date of acquisition?
What amount of goodwill should be attributed to the non-controlling interest at the date of acquisition?
What is the dollar amount of non-controlling interest that should appear in a consolidated balance sheet prepared at the date of acquisition?
What is the dollar amount of Float Corp.'s net assets that would be represented in a consolidated balance sheet prepared at the date of acquisition?
What is the dollar amount of fair value over book value differences attributed to Perch at the date of acquisition?

Attachments

Solution Preview

What amount of goodwill should be attributed to Perch at the date of acquisition? $120,000

They paid $1,600,000 for 80% of $1,850,000 = $1,480,000 (book value of assets on prior firm's books is not relevant). So, they paid $1,600,000 - 1,480,000 = $120,000 more than the fair value of assets identified.

What amount of goodwill should be attributed to the non-controlling interest at the date of acquisition? $30,000

The non-controlling interest will be ...

Solution Summary

Your tutorial shows how each amount is derived with instructional notes.

$2.19