Question

At the beginning of fiscal 2014, Standard Rate Company acquired a small savings and loan association for $68 million. The book value of the assets of the acquired company were $174 million, its liabilities $115 million. An appraiser determined that the acquiree's land had a fair value of $2 million in excess of its net book value. Standard Rate also determined that the acquiree had an unrecorded liability of $4.5 million relating to a lawsuit. The book value of all other assets and liabilities approximated fair value. What did Standard Rate Company record as goodwill for this acquisition

Answer 1

$11,500,000

Step-by-step explanation:

Particulars Amount'million

Book value of the assets of the acquired company $174

Add: Fair value in excess of its net book value $2

Less: Liabilities $115

Less: Unrecorded liability relating to a lawsuit $4.50

Less: Acquisition Cost of the company $68

Goodwill $11.50