Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair value of Float's net assets was $1,850,000, and the book value was $1,500,000. The non-controlling interest shares of Float Corp. are not actively traded.
What is the total amount of goodwill recognized at the date of acquisition?
A) $150,000.
B) $250,000.
C) $0.
D) $120,000.
E) $170,000.

Question

Quizplus · Accepted Answer

FV $1,850,000 - FV of Stock at Purchase Price for 100% ($1,600,000/.80) $2,000,000 = ($150,000) Goodwill

Perch Co Acquired 80% of the Common Stock of Float Corp