Cockroaches Limited acquired the identifiable assets, liabilities and contingent liabilities of Inglis Limited for $268 000. The items acquired, stated at fair value, are: plant $144 000; inventory $80 000; accounts receivable $36 000; patents $20 000; and accounts payable $32 000. The difference on acquisition is:

Question

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The total fair value of identifiable net assets is $248,000 ($144,000 + $80,000 + $36,000 + $20,000 - $32,000). The acquisition cost is $268,000, resulting in goodwill of $20,000 ($268,000 - $248,000).

Cockroaches Limited Acquired the Identifiable Assets, Liabilities and Contingent Liabilities