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Brown Inc. acquired 75% of the common stock of Allen Co. for $1,800,000. The fair value...

Brown Inc. acquired 75% of the common stock of Allen Co. for $1,800,000. The fair value of Allen's net assets was $2,240,000, and the book value was $1,800,000. The non-controlling interest shares of Allen Corp. are not actively traded and there is no control premium.

  1. What is the total amount of goodwill recognized at the date of acquisition?

A. $120,000.
B. $150,000.
C. $0.
D. $160,000.

  1. What amount of goodwill should be attributed to Brown Inc. at the date of acquisition?

A. $120,000.
B. $150,000.
C. $0.
D. $170,000.

​​​​​​​

3.What amount of goodwill should be attributed to the non-controlling interest at the date of acquisition?

A. $0.
B. $30,000.
C. $40,000.
D. $120,000.

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Brown Inc.
What is the total amount of goodwill recognized at the date of acquisition?
Purchase price for 75% 1,800,000.00
Purchase price for 100% 2,400,000.00
Fair value of Allen's net assets 2,240,000.00
Goodwill recognized      160,000.00 Option D
What amount of goodwill should be attributed to Brown Inc. at the date of acquisition?
Fair value of Allen's net assets 2,240,000.00
75% of Fair value 1,680,000.00
Purchase price 1,800,000.00
Goodwill attributed to Brown      120,000.00 Option A
What amount of goodwill should be attributed to the non-controlling interest at the date of acquisition?
Total Goodwill recognized      160,000.00
Goodwill attributed to Brown      120,000.00
Goodwill attributed to non-controlling interest        40,000.00 Option C

ekkarill92 answered 1 year ago
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