Range Ltd acquired a business for the following consideration: Cash $50 000 Land—Carrying amount $90 000 Fair value $150 000 Shares in Range Ltd—Fair value $60 000 (Hint: it is the fair value of the consideration that is relevant) The business being acquired had the following assets and liabilities as reported in the balance sheet (there were no contingent liabilities): Liabilities Bank loan $50 000 Creditors $30 000 Assets Plant and equipment $150 000 Motor vehicle $30 000 (the plant and equipment and motor vehicle have fair value of $170 000 and $30 000, respectively) HOW MUCH GOODWILL WAS ACQUIRED?
Range Ltd acquired a business for the following consideration: Cash $50 000 Land—Carrying amount $90 000 Fair value $150 000 Shares in Range Ltd—Fair value $60 000 (Hint: it is the fair value of the consideration that is relevant) The business being acquired had the following assets and liabilities as reported in the balance sheet (there were no contingent liabilities): Liabilities Bank loan $50 000 Creditors $30 000 Assets Plant and equipment $150 000 Motor vehicle $30 000 (the plant and equipment and motor vehicle have fair value of $170 000 and $30 000, respectively) HOW MUCH GOODWILL WAS ACQUIRED?
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter2: Basic Accounting Systems: Cash Basis
Section: Chapter Questions
Problem 6CDQ: Capstone Consulting Services acquired land 5 years ago for $200,000. Capstone recently signed an...
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Range Ltd acquired a business for the following consideration:
- Cash $50 000
- Land—Carrying amount $90 000
Fair value $150 000
- Shares in Range Ltd—Fair value $60 000
(Hint: it is the fair value of the consideration that is relevant)
The business being acquired had the following assets and liabilities as reported in the balance sheet (there were no
Liabilities
- Bank loan $50 000
- Creditors $30 000
Assets
- Plant and equipment $150 000
- Motor vehicle $30 000
- (the plant and equipment and motor vehicle have fair value of $170 000 and $30 000, respectively)
HOW MUCH
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