Summer 20 Company acquired 100% of the voting common stock of Towel, Corp on January 1, 2020. Book and fair values as of January 1, 2020 are below. Assume that Summer 20 issued 11,000 shares of common stock with a $5 par value and a $50 fair value to obtain all of Towel's outstanding stock. In this acquisition transaction, how much consolidated goodwill should be recognized? Show and label all work for credit. Retained Earnings 1/1/20 Cash and Receivables Inventory Land Buildings (net) Equipment (net) Liabilities Common Stock Additional Paid in Capital Summer 20 Book Value Towel Corp Book Value $245,000 $170,000 $225,000 $280,000 $480,000 $120,000 $650,000 $360,000 $20,000 Towel Corp Fair Value $255,000 $80,000 $70,000 $180,000 $210,000 $220,000 $250,000 $250,000 $270,000 $90,000 $90,000 $440,000 $420,000 $85,000 $40,000

Summer 20 Company acquired 100% of the voting common stock of Towel, Corp on January 1, 2020. Book and fair values as of January 1, 2020 are below. Assume that Summer 20 issued 11,000 shares of common stock with a $5 par value and a $50 fair value to obtain all of Towel's outstanding stock. In this acquisition transaction, how much consolidated goodwill should be recognized? Show and label all work for credit. Retained Earnings 1/1/20 Cash and Receivables Inventory Land Buildings (net) Equipment (net) Liabilities Common Stock Additional Paid in Capital Summer 20 Book Value Towel Corp Book Value $245,000 $170,000 $225,000 $280,000 $480,000 $120,000 $650,000 $360,000 $20,000 Towel Corp Fair Value $255,000 $80,000 $70,000 $180,000 $210,000 $220,000 $250,000 $250,000 $270,000 $90,000 $90,000 $440,000 $420,000 $85,000 $40,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compute for the goodwill.
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