On January 2, 2017, NIU purchased 100% of Huskie Corp. for $128,000. The book value of the Huskie's assets is $120,000, and the book value of its liabilities is $60,000. The fair market value of the net assets is $80,000. Goodwill should be reported at

Question

Quizplus · Accepted Answer

Goodwill is calculated as the purchase price minus the fair market value of net assets. Here, NIU purchased Huskie Corp. for $128,000, and the fair market value of Huskie's net assets (assets minus liabilities) is $80,000. Therefore, goodwill = $128,000 - $80,000 = $48,000.

On January 2, 2017, NIU Purchased 100% of Huskie Corp