ZuoTi.Pro
Question

MAJ Corporation acquired 90% of the common stock of Min Co. for $495,000. MAJ previously held...

MAJ Corporation acquired 90% of the common stock of Min Co. for $495,000. MAJ previously held no equity interest in Min. On the date of acquisition, the carrying amount of Min's identifiable net assets equaled $300,000. The acquisition-date fair values of Min's inventory and equipment exceeded their carrying amounts by 60k and 40k, respectively. The Carrying amounts of the other assets and liabilities were equal to their acquisition-date fair values. What amount should MAJ recognize as goodwill immediately after the acquisition?

A. $150,000

B. $90,000

C. $65,000

D. $114,000

There's no given "non-controlling interest" given in the problem.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Hi

Let me know in case any issue and query:

Goodwill recognization = (Fair value of business - Fair value of net assets)

Answer is highlighted in yellow: Solution: Answer: A. $150,000 Explanation Goodwill recognization- (Fair value of business - Fair value of net assets) (495000/90%) Fair value of Business Less: Fair value of net assets (300000+60000+40000) Goodwill $5,50,000 $4,00,000 $1,50,000

0 0
Add a comment
Know the answer?
Add Answer to:
MAJ Corporation acquired 90% of the common stock of Min Co. for $495,000. MAJ previously held...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Practicum Co. pad $1.2 million for an 80% interest in the common stock of Sarong Co....

    Practicum Co. pad $1.2 million for an 80% interest in the common stock of Sarong Co. Practicum had no previous equity interest in Sarong. On the acquisition date, Sarong's identifiable net assets had a $1.3 million carrying amount, and their fair value equaled $1.4 million. The fair value of the noncontrolling interest (NCI) on the date of acquisition was $360,00. Practicum should record goodwill of? (please show work)

  • A parent acquired 90% of the voting stock of a subsidiary for $20,000. The fair value...

    A parent acquired 90% of the voting stock of a subsidiary for $20,000. The fair value of the noncontrolling interest was $2,000. The subsidiary's book value at the date of acquisition was $1,000. Following is revaluation information for the subsidiary's identifiable net assets at the date of acquisition: Fair Value – Book Value Inventories $   (400) Equipment (10,000) Identifiable intangibles 16,000 What is the amount of consolidated goodwill attributed to the noncontrolling interest at the date of acquisition, following U.S....

  • On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc.,...

    On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc., for $510 million. The fair value of Harman's identifiable tangible and intangible assets totaled $575 million, and the fair value of liabilities assumed by Pesky was $149 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2021. Management has provided the following information: Fair value of Harman, Inc. $ 490 million Fair value of Harman's net...

  • A Ltd acquired all of the issued shares of B Ltd. When preparing the consolidated financial...

    A Ltd acquired all of the issued shares of B Ltd. When preparing the consolidated financial statements, goodwill in relation to the acquisition will be recognised when: a. the cost of the acquisition is equal to the fair value of the subsidiary’s identifiable net assets b. the cost of the acquisition is more than the carrying amount of the subsidiary’s identifiable net assets only to the extent attributable to the non-controlling interest c. the cost of the acquisition of the...

  • On January 1, Patterson Corporation acquired 80 percent of the 100,000 outstanding voting shares of Soriano,...

    On January 1, Patterson Corporation acquired 80 percent of the 100,000 outstanding voting shares of Soriano, Inc., in exchange for $31.25 per share cash. The remaining 20 percent of Soriano's shares continued to trade for $30 both before and after Patterson's acquisition At January 1, Soriano's book and fair values were as follows: Remaining Life Current assets Buildings and equipment Trademarks Patented technology Values $ 80,000 1,000,000 900,000 2,000,000 5 years 10 years 4 years Book Values 80,000 1,250,000 700,000...

  • Aye Ltd acquired 90% interest in Bee Ltd on 1 January 20x1, for which the purchase...

    Aye Ltd acquired 90% interest in Bee Ltd on 1 January 20x1, for which the purchase consideration was structured as follows: · Cash of $800,000. · A parcel of freehold land with carrying amount of $300,000 in the books of Aye Ltd but had a fair value of $400,000 as at 1 January 20x1. · A contingent payment of $100,000 payable in two years from the acquisition- date if Bee Ltd meets specific profit targets. On 1 January 20x1, based...

  • On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc.,...

    On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc., for $590 million. The fair value of Harman's identifiable tangible and intangible assets totaled $631 million, and the fair value of liabilities assumed by Pesky was $169 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2021. Management has provided the following information: Fair value of Harman, Inc. Fair value of Harman's net assets (excluding goodwill)...

  • On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc.,...

    On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc., for $570 million. The fair value of Harman's identifiable tangible and intangible assets totaled $617 million, and the fair value of liabilities assumed by Pesky was $163 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2021. Management has provided the following information: Fair value of Harman, Inc. Fair value of Harman's net assets (excluding goodwill)...

  • The Smithson Corporation acquired all of the outstanding common stock of the Rider Corporation in exchange...

    The Smithson Corporation acquired all of the outstanding common stock of the Rider Corporation in exchange for $180 million cash. Smithson assumed all of Rider’s long-term liabilities, which have a fair value of $120 million at the date of acquisition. The fair values of all identifiable assets of Rider are as follows: receivables of $50 million, inventory of $70 million, property, plant, and equipment of $90 million, and patent of $40 million). What is the cost of the goodwill resulting...

  • On May 28, 2021. Pesky Corporation acquired all of the outstanding common stock of Harman, Inc....

    On May 28, 2021. Pesky Corporation acquired all of the outstanding common stock of Harman, Inc. for $590 million. The fair value of Harman's identifiable tangible and intangible assets totaled $631 milion, and the fair value of abilities assumed by Pesky was 5169 million Pesky performed a goodwill impairment test at the end of ts fiscal year ended December 31, 2021 Management has provided the to lowing formation Fair value of area's reta s (excluding Hoodvill) Book value of huren's...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT