ACQ co acquired 100% of ownership SUB co by paying 100,000 cash. After acquisiti
ID: 2392454 • Letter: A
Question
ACQ co acquired 100% of ownership SUB co by paying 100,000 cash. After acquisition, the balance sheet of ACQ reported as follows:
Current Assets $30,000
Investment $100,000
PP&E $70,000
Total Assets $200,000
Liabilities $100,000
Shareholders' Equity $100,000
The Fair value of the SUB co was reported as the following
Current Assets $30,000
PP&E $30,000
Total Assets $60,000
Liabilities $20,000
Shareholders' Equity $40,000
How much of goodwill will be recorded in the consolidated Balance sheet for ACQ Co reflecting the acquisition of SUB Co? Put your answer without comma or dollar sign.
Explanation / Answer
Computation of Goodwill in Consolidated balance sheet: Total c onsideration: 100,000 Less: Net assets of SUB co. 40000 Assets of SUB co. 60000 Less: Liabilities of SUB co. 20000 Goodwill 60000
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