On January 1,20X7,Falcon acquired 100% of the outstanding shares of Intra for $3,600,000.Both are mining companies involved in nickel and copper production.The balance sheet for Intra at the date of acquisition is shown below together with estimated of the fair values and tax values of Intra's recorded assets and liabilities.
The tax rate for Intra and for Falcon is 30%.
Required:
What is the amount of goodwill to be recorded for this business combination?

Question

On January 1,20X7,Falcon acquired 100% of the outstanding shares of Intra for $3,600,000.Both are mining companies involved in nickel and copper production.The balance sheet for Intra at the date of acquisition is shown below together with estimated of the fair values and tax values of Intra's recorded assets and liabilities.  
The tax rate for Intra and for Falcon is 30%.
Required:
What is the amount of goodwill to be recorded for this business combination?

Quizplus · Accepted Answer

The Answer is Deferred Income taxes Temporary difference × tax rate = $814 × 30% = 244 Calculation of goodwill (in 000s):

Deferred Income taxes
Temporary difference × tax rate = $814 × 30% = 244
Calculation of goodwill (in 000s): Deferred Income taxes Temporary difference × tax rate = $814 × 30% = 244 Calculation of goodwill (in 000s):

On January 1,20X7,Falcon Acquired 100% of the Outstanding Shares of Intra