Pasta acquired 100% of Sauce for $200. At acquisition date Sauce had equity of $170, comprised as follows: Capital 100 Asset revaluation reserve20 Retained earnings 50 Equity 170 The book value of net assets was considered to be close to fair value,except for the following: CostCarrying amountFair value Intangibles0030 The tax rate is 30%. What is the amount of goodwill acquired by Pasta?

Goodwill refers to the intangible asset that arises generally at the time of purcahse or sale of…

Answered: Pasta acquired 100% of Sauce for $200.…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter7: Property Transactions: Basis, Gain And Loss, And Nontaxable Exchanges

Section: Chapter Questions

Problem 32P

See similar textbooks

Related questions

Question

Pasta acquired 100% of Sauce for $200.
At acquisition date Sauce had equity of $170, comprised as follows:

Capital		100
Asset revaluation reserve	20
Retained earnings		50
Equity		170
The book value of net assets was considered to be close to fair value,
except for the following:
	Cost	Carrying amount	Fair value
Intangibles	0	0	30
The tax rate is 30%.

What is the amount of goodwill acquired by Pasta?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions