Question

With the following information create an allocation schedule. Show the excess of fair value over

book value and the amount of goodwill.

Jarret Corporation paid a total consideration of $900,000 for all stock in Connor Company.

Connor Company had a total book value of $690,000. Connor had the following assets with book

values and fair values.

Assets          Book Value    Fair Value    

Equipment     200,000            250,000

Trademarks   150,000          210,000

Patents          150,000         220,000

Answer 1

	a.)	Excess of fair value over book value:-
				Amount in $
		Equipment	(250,000 - 200,000 )	50,000
		Trademarks	(210,000 - 150,000 )	60,000
		Patents	(220,000 - 150,000 )	70,000
		Total Excess of fair value over book value		1,80,000
	b.)	Calculation of goodwill:-
				Amount in $
		Purchase consideration		9,00,000
		( For 100% purchase of stock)
		Less: Net assest purchased (100%)		- 8,70,000
		Book value	6,90,000
		Add: Fair value in excess of book value from (a)	1,80,000
		Goodwill		30,000