Homework Answers
Dear Student,
As per the Chegg policy, only the first question should be answered. Kindly take note of it.
Value analysis schedule:
|
Company Implied Fair Value |
Parent price (80%) |
NCI value (20%) |
|
|
Company fair value |
1402000 |
1050000 |
352000 |
|
Fair value identifiable net assets |
1760000 |
1408000 |
352000 |
|
Gain |
$(358000) |
$(358000) |
0 |
70000*15 = 1050000
Company fair value = parent value + NCI value = 1050000+352000 = 1402000
Company’s NCI value cannot be less than NCI share of identifiable net assets. Therefore, it is $352000
|
Fair value subsidiary |
1402000 |
|
Less book value: |
|
|
Common stock |
200000 |
|
APIC |
300000 |
|
Retained earnings |
1200000 |
|
Total stockholders’ equity |
1700000 |
|
Excess of fair value over book value |
298000 |
|
Adjust identifiable accounts: |
|
|
Plant and equipment (1600000-1300000) |
300000 |
|
Goodwill |
356000 |
|
Gain on acquisition |
(358000) |
|
Total |
298000 |
Therefore,
Goodwill = $356000
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