Consolidation Goodwill and Building Value
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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.
Using the acquisition method, what amount of goodwill should appear on a consolidated balance sheet prepared immediately after the combination?
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?
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Solution Summary
The solution determines what amount of goodwill should appear on a consolidated balance sheet prepared immediately after the combination.
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Goodwill
Fair value of acquire: 600,000
Net assets acquired: ...
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