Amie, Inc., has 153,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 45,900 of Amie’s shares on January 1, 2018, for $183,600 when Amie’s net assets had a total fair value of $560,600. On July 1, 2021, Prairie bought an additional 91,800 shares of Amie from a single stockholder for $6 per share. Although Amie’s shares were selling in the $5 range around July 1, 2021, Prairie forecasted that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie’s identifiable net assets had a fair value of $775,800 at July 1, 2021, how much goodwill should Prairie report in its postcombination consolidated balance sheet?
Amie, Inc., has 153,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 45,900 of Amie’s shares on January 1, 2018, for $183,600 when Amie’s net assets had a total fair value of $560,600. On July 1, 2021, Prairie bought an additional 91,800 shares of Amie from a single stockholder for $6 per share. Although Amie’s shares were selling in the $5 range around July 1, 2021, Prairie forecasted that obtaining control of Amie would produce significant revenue synergies to justify the premium price paid. If Amie’s identifiable net assets had a fair value of $775,800 at July 1, 2021, how much goodwill should Prairie report in its postcombination consolidated balance sheet?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Amie, Inc., has 153,000 shares of $2 par value stock outstanding. Prairie Corporation acquired 45,900 of Amie’s shares on January 1, 2018, for $183,600 when Amie’s net assets had a total fair value of $560,600. On July 1, 2021, Prairie bought an additional 91,800 shares of Amie from a single stockholder for $6 per share. Although Amie’s shares were selling in the $5 range around July 1, 2021, Prairie
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