Firm A purchased all the outstanding common shares of firm B for $300,000. Information about firm B follows: $\begin{array} { | l | l | l | }
\hline & \text { Book value } & \text { Market value } \
\hline \text { Total assets } & \$ 600,000 & \$ 800,000 \
\hline \text { Total liabilities } & 550,000 & 550,000 \
\hline
\end{array}$
How much will Firm A record as goodwill on this purchase?

Question

Firm A purchased all the outstanding common shares of firm B for $300,000. Information about firm B follows: $\begin{array} { | l | l | l | } 
\hline & \text { Book value } & \text { Market value } \
\hline \text { Total assets } & \$ 600,000 & \$ 800,000 \
\hline \text { Total liabilities } & 550,000 & 550,000 \
\hline
\end{array}$
How much will Firm A record as goodwill on this purchase?

Quizplus · Accepted Answer

The Answer of Firm A purchased all the outstanding common shares of firm B for $300,000. Information about firm B follows: $\begin{array} { | l | l | l | } 
\hline & \text { Book value } & \text { Market value } \
\hline \text { Total assets } & \$ 600,000 & \$ 800,000 \
\hline \text { Total liabilities } & 550,000 & 550,000 \
\hline
\end{array}$
How much will Firm A record as goodwill on this purchase?

Firm a Purchased All the Outstanding Common Shares of Firm