Compute consolidated goodwill at the date of the acquisition

A)  $360.

B)  $450.

C)  $460.

D)  $440.

E)  $475.

Answer: B

Learning Objective: 02-05 

Learning Objective: 02-06a

Learning Objective: 02-07

Topic: Acquisition―Calculate goodwill or bargain

Topic: Consolidation worksheet

Difficulty: 2 Medium 

Blooms: Apply

AACSB: Knowledge Application

AICPA: BB Critical Thinking

AICPA: FN Measurement

Feedback:

Goodwill = Total Consideration Paid – Excess of Fair Value of Assets Acquired Over Liabilities Assumed

Total Consideration Paid: $1,750

Net Assets/Liabilities at Fair Value: $1,300

Goodwill:Consideration ($1,750) – Net Assets/Liabilities ($1,300) = $450

Consolidated Goodwill: $450