Posch Company issued 12,000 shares of its $20 par value common stock for the net assets of Sato Company in a business combination under which Sato Company will be merged into Posch Company.On the date of the combination,Posch Company common stock had a fair value of $30 per share.Balance sheets for Posch Company and Sato Company immediately prior to the combination were as follows: If the business combination is treated as an acquisition and Sato Company's net assets have a fair value of $343,200,Posch Company's balance sheet immediately after the combination will include goodwill of:

Question

Posch Company issued 12,000 shares of its $20 par value common stock for the net assets of Sato Company in a business combination under which Sato Company will be merged into Posch Company.On the date of the combination,Posch Company common stock had a fair value of $30 per share.Balance sheets for Posch Company and Sato Company immediately prior to the combination were as follows:  If the business combination is treated as an acquisition and Sato Company's net assets have a fair value of $343,200,Posch Company's balance sheet immediately after the combination will include goodwill of:

Quizplus · Accepted Answer

First, we need to calculate the total fair value of the consideration given by Posch Company:
12,000 shares x $30 per share = $360,000

Then, we need to compare this amount with the fair value of Sato Company's net assets to determine if there is goodwill:

$360,000 - $343,200 = $16,800

Therefore, the goodwill recorded on Posch Company's balance sheet after the combination is $16,800.

Posch Company Issued 12,000 Shares of Its $20 Par Value