1 answer

View Policies Current Attempt in Progress On May 31, 2018, Armstrong Company paid $3,500,000 to acquire...

Question:

View Policies Current Attempt in Progress On May 31, 2018, Armstrong Company paid $3,500,000 to acquire all of the common sto

View Policies Current Attempt in Progress On May 31, 2018, Armstrong Company paid $3,500,000 to acquire all of the common stock of Hall Corporation, which became a division of Armstrong. Hall reported the follawing balance sheet at the time of the acquisition: $ 900,000 Current liabilities S 600,000 Current assets Noncurrent assets 2.700.000 Long-term liabilities 500,000 Stockholder's equity 2,500.000 Total liabilities and Total assets $3,600.000 $3.600,000 stockholder's equity It was determined at the date of the purchase that the fair value of the identifiable net assets of Hall was $3,100.000 At December 31, 2018, Hall reports the following balance sheet information: $ 800,000 Current assets Noncurrent assets (including goodwill recognized in purchase) 2,400,000 1700.000) Current liabilities (S00,000) Long-term liabilities $2000,000 Net assets It is determined that the fair value of the Hall division is $2,200,000. The recorded amount for Hall's net assets lexcluding goodwill) is the same as fair value, except for property, plant. and equipment, which has a fair value of $200.000 above the carrying value. Part 1 Compute the amount of goodwill recognized, if any, on May 31, 2018. Amount of goodwill eTextbook and Media

Answers

Goodwill on may 31 2018 = 400,000.

working:

amount paid 3,500,000
less:fair value of identifiable net assets (3,100,000)
good will 400,000
.

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