On January 2, 2016, Eagle Company acquired 100% of Solly Company's common stock for $900,000 cash in a merger transaction. At this date, the book value of all of Solly Company's assets, except a building, was $700,000. The fair value of these assets without the building was $800,000. In addition to these assets is a building that has a book value of $400,000 and a fair value of $440,000. The book value and fair value of Solly Company's liabilities is $520,000.
Required:
A.Prepare a schedule to calculate the goodwill arising from the transaction.
B.Prepare the journal entry to record the merger on the books of Eagle Company at the acquisition date.

Question

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The Answer of On January 2, 2016, Eagle Company acquired 100% of Solly Company's common stock for $900,000 cash in a merger transaction. At this date, the book value of all of Solly Company's assets, except a building, was $700,000. The fair value of these assets without the building was $800,000. In addition to these assets is a building that has a book value of $400,000 and a fair value of $440,000. The book value and fair value of Solly Company's liabilities is $520,000.
Required:
A.Prepare a schedule to calculate the goodwill arising from the transaction.
B.Prepare the journal entry to record the merger on the books of Eagle Company at the acquisition date.

On January 2, 2016, Eagle Company Acquired 100% of Solly