Enya Corporation acquired 100 percent of Celtic Corporation's common stock on January 1, 20X9. Summarized balance sheet information for the two companies immediately after the combination is provided:

-Based on the information provided,the consolidated balance sheet of Enya and Celtic will reflect goodwill in the amount of:
A) $0.
B) $58,000.
C) $22,000.
D) $36,000.

Question

Enya Corporation acquired 100 percent of Celtic Corporation's common stock on January 1, 20X9. Summarized balance sheet information for the two companies immediately after the combination is provided:
 
-Based on the information provided,the consolidated balance sheet of Enya and Celtic will reflect goodwill in the amount of:
A) $0. 
B) $58,000. 
C) $22,000. 
D) $36,000.

Quizplus · Accepted Answer

Goodwill is calculated as the excess of the purchase price over the fair value of the net identifiable assets acquired. The question implies that the calculation has been done, resulting in goodwill of $22,000.

Enya Corporation Acquired 100 Percent of Celtic Corporation's Common Stock