An entity should report an investment in marketable equity securities that does not result in significant...
An entity should report an investment in marketable equity securities that does not result in significant influence or control over the investee at:
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Lower of cost or market, with holding gains and losses included in earnings. |
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Lower of cost or market, with holding gains included in earnings only to the extent of previously recognized holding losses. |
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Fair value, with holding gains included in earnings only to the extent of previously recognized holding losses. |
||
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Fair value, with holding gains and losses included in earnings. |
Slice Co. purchased 30% of Lobb Co's outstanding common stock on December 31 for $200,000. On that date, Lobb's equity was $500,000, and the fair value of its net assets was $600,000. On December 31, what amount of goodwill should Slice attribute to this acquisition?
| A. |
$0 |
|
| B. |
$20,000 |
|
| C. |
$30,000 |
|
| D. |
$50,000 |
Homework Answers
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1. Option D Fair value, with holding gains and losses included in earnings. |
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2. Option B Goodwill = Consideration paid - 30% of identifiable net assets received = 200,000 - (600,000*30%) = 20,000 |
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