Mercury Corporation acquired 100 percent of the stock of Jupiter Company when the book value of Jupiter's net assets was $250,000.The fair value of Jupiter's net assets was $280,000 on the acquisition date.
-Based on the preceding information,what amount of goodwill will be reported in consolidated financial statements presented immediately following the combination if Mercury paid $295,000 for the acquisition?

Question

Quizplus · Accepted Answer

Goodwill is calculated as the purchase price minus the fair value of net assets acquired. Here, $295,000 - $280,000 = $15,000.

Mercury Corporation Acquired 100 Percent of the Stock of Jupiter