. On April 1, 20X2, Jack Company paid $800,000 for all of Ann Corporation\'s iss

Question

. On April 1, 20X2, Jack Company paid $800,000 for all of Ann Corporation's issued and outstanding common stock. Ann's recorded assets and liabilities on April 1, 20X2, were as follows: Cash Inventory Property & equipment (net of accumulated depreciation of $320,000) $-80,000 240,000 480,000 (180,000) Liabilities On April 1, 20X2, Ann's inventory was determined to have a fair value of $190,000, and the property an equipment had a fair value of $560,000. What is the amount of goodwill resulting from the business combination? O$50,000. so. $180,000. $150,000. References eBook & Resources

Explanation / Answer

Answer : $150000

Goodwill = Amount paid towards the acquisition of Common Stock of Ann - (Fair value of inventory and property and equipment + cash - liabilities) = $800000 - (190000 + 560000 + 80000 - 180000) = $150000

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