Question

Rommer Company purchases Daley Inc. for cash on January​ 1, 2018. The book value of Daley​ Company's net​ assets, as reflected on its December​ 31, 2017 statement of financial position is . An analysis by Rommer on December​ 31, 2017 indicates that the fair value of​ Daley's tangible assets exceeded the book value by ​, and the fair value of identifiable intangible assets exceeded book value by . How much goodwill should be recognized by Rommer Company when recording the purchase of Daley​ Inc.? A. B. C. D.

Answer 1

$85,000

Step-by-step explanation:

Calculation to determine How much goodwill should be recognized by Rommer Company when recording the purchase of Daley​ Inc.?

Using this formula

Good will=purchases-book value - fair value of tangible assets-fair value of intangible assets

Let plug in the formula

Goodwill=$930,000-$750,000-$50,000-$45,000

Goodwill=$85,000

Therefore How much goodwill should be recognized by Rommer Company when recording the purchase of Daley​ Inc. is $85,000