On 1 June 2012 S Company acquired for $145,000 cash the business of G Inc.The carrying amount of G Inc's net assets at the time of the acquisition was $110 000 while independent valuers calculated their fair value at $130 000.S Company should debit 'Goodwill' for the amount of:

Question

Quizplus · Accepted Answer

The difference between the fair value of the net assets and the purchase price is goodwill. In this case, the fair value of the net assets is $130,000 and the purchase price is $145,000, so the goodwill is $15,000.

On 1 June 2012 S Company Acquired for $145,000 Cash