Goodwill Pindar Corporation acquired all the outstanding stock of Strauss Company for 523,000,000 on January 1, 2020. On the date of acquisition, Strauss had the following balance sheet: All Strauss' assets and liabilities have book values equal to their fair values except for equipment, which has a fair value of $20,700,000. Required: 1. Calculate the amount of goodwill. 2. Prepare the journal entry by Pindar to record the acquisition. 3. Assume that instead of acquiring all the outstanding common stock of Strauss, Pindar acquired 100% of Strauss’ net assets. What would Pindar’s journal entry be in this case?

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881
BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881

Solutions

Chapter
Section
Chapter A2, Problem 30E
Textbook Problem

Goodwill

Pindar Corporation acquired all the outstanding stock of Strauss Company for 523,000,000 on January 1, 2020. On the date of acquisition, Strauss had the following balance sheet:

Chapter A2, Problem 30E, Goodwill Pindar Corporation acquired all the outstanding stock of Strauss Company for 523,000,000 on

All Strauss' assets and liabilities have book values equal to their fair values except for equipment, which has a fair value of $20,700,000.

Required:

1. Calculate the amount of goodwill.

2. Prepare the journal entry by Pindar to record the acquisition.

3. Assume that instead of acquiring all the outstanding common stock of Strauss, Pindar acquired 100% of Strauss’ net assets. What would Pindar’s journal entry be in this case?

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Chapter A2 Solutions

Cornerstones of Financial Accounting
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