Question

Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000.The fair value of Float Is net assets was $1,850,000, and the book value was $1,500,000.The non controlling interest shares of Float Corp. are not actively traded. What is the total amount of goodwill recognized at the date of acquisition

Answer 1

150,000

Step-by-step explanation:

Answer:

$150,000

Step-by-step explanation:

Calculation for the total amount of goodwill recognized at the date of acquisition

First step is to calculate the Cost(PP)

Cost(PP) =$1,600,000/.8

Cost(PP)= $2,000,000

Second step is to calculate the goodwill

to be recognized

Goodwill=$2,000,000- $1,850,000

Goodwill= 150,000

Therefore the total amount of goodwill recognized at the date of acquisition is $150,000