Tosco paid $540,000 for eighty percent of the stock of Martz Co. when the book value of Martz's net assets was $600,000. For all of Martz's assets and liabilities, book value and fair market value were approximately equal.
On January 1, 2008, Elva Corp. paid $750,000 for eighty percent of Fenton Co. when the book value of Fenton's net assets was $800,000. Fenton owned a building with a fair market value of $150,000 and a book value of $120,000.
At what amount would the building appear on a consolidated balance sheet prepared immediately after the combination, assuming Elva used the acquisition method?© BrainMass Inc. brainmass.com June 3, 2020, 11:34 pm ad1c9bdddf
Fair value of acquire: 600,000
Net assets acquired: ...
The solution determines what amount of goodwill should appear on a consolidated balance sheet prepared immediately after the combination.