Resnick Inc. acquired 75% shareholding in Canty Ltd. for $20 million. Book value of net identifiable assets of Canty is $14 million. The fair value of Canty's asset is the same as their book value except accounts receivables which are impaired by $1 million. Book value of assets is $54 million while book value of liabilities is $40 million. The tax rate is 30%.
Required:
Calculate goodwill using the partial goodwill method.

Question

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The Answer of Resnick Inc. acquired 75% shareholding in Canty Ltd. for $20 million. Book value of net identifiable assets of Canty is $14 million. The fair value of Canty's asset is the same as their book value except accounts receivables which are impaired by $1 million. Book value of assets is $54 million while book value of liabilities is $40 million. The tax rate is 30%.
Required:
Calculate goodwill using the partial goodwill method.