On July 31, 2011, Cleveland Company purchased for $4,000,000 cash all of the outstanding common stock of Gem Company when Gem's balance sheet showed net assets of $3,200,000. Gem's assets and liabilities had fair values different from the book values as follows:

As a result of the transaction, what amount will be shown as goodwill in the July 31, 2011, consolidated balance sheet of Cleveland Company and its wholly owned subsidiary, Gem Company?

Question

On July 31, 2011, Cleveland Company purchased for $4,000,000 cash all of the outstanding common stock of Gem Company when Gem's balance sheet showed net assets of $3,200,000. Gem's assets and liabilities had fair values different from the book values as follows:

As a result of the transaction, what amount will be shown as goodwill in the July 31, 2011, consolidated balance sheet of Cleveland Company and its wholly owned subsidiary, Gem Company?

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The Answer of On July 31, 2011, Cleveland Company purchased for $4,000,000 cash all of the outstanding common stock of Gem Company when Gem's balance sheet showed net assets of $3,200,000. Gem's assets and liabilities had fair values different from the book values as follows:

As a result of the transaction, what amount will be shown as goodwill in the July 31, 2011, consolidated balance sheet of Cleveland Company and its wholly owned subsidiary, Gem Company?

On July 31, 2011, Cleveland Company Purchased for $4,000,000 Cash