Orlando Company acquired all of the shares of Tampa Company for $100.The fair values of Tampa Company's assets and liabilities at the time of acquisition were $200 and $120, respectively.On the consolidated balance sheet of Orlando Company, goodwill is _____.

Question

Quizplus · Accepted Answer

Goodwill is the excess of the consideration transferred over the fair value of the net assets acquired. In this case, the consideration transferred is $100, and the fair value of Tampa Company's net assets is $80 ($200 - $120). Therefore, the goodwill is $20 ($100 - $80).

Orlando Company Acquired All of the Shares of Tampa Company