During 2010,Manning Corporation purchased 100% of the outstanding voting shares of Brady Corporation for $4.0 million.Brady's assets had a book value of $5.0 million and fair market value of $6.5 million.The book value as well as fair market value of Brady's liabilities equaled $3.2 million.How much was paid for goodwill?

Question

Quizplus · Accepted Answer

Goodwill ($700,000) = Amount paid ($4.0 million) - Fair value of acquired net assets [Assets ($6.5 million) - Liabilities ($3.2 million]

During 2010,Manning Corporation Purchased 100% of the Outstanding Voting Shares