Amie, Inc., has 168,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 50,400 of...
Amie, Inc., has 168,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 50,400 of Amie’s shares on January 1, 2015, for $201,600 when Amie’s net assets had a total fair value of $628,700. On July 1, 2018, Prairie bought an additional 100,800 shares of Amie from a single stockholder for $6 per share. Although Amie’s shares were selling in the $5 range around July 1, 2018, Prairie forecasted that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie’s identifiable net assets had a fair value of $868,800 at July 1, 2018, how much goodwill should Prairie report in its postcombination consolidated balance sheet?
Homework Answers
| 30% previously owned fair value (50400*$5) | 252000 |
| 60% new shares acquired (100800*6) | 604800 |
| 10% NCI fair value (16800*5) | 84000 |
| Acquisition-date fair value | 940800 |
| Net assets' fair value | 868800 |
| Goodwill | 72000 |
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Amie, Inc., has 168,000 shares of $2 par value stock
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