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13 August, 17:21

Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair value of Float's net assets was $1,850,000, and the book value was $1,500,000. The noncontrolling interest shares of Float Corp. are not actively traded. What amount of goodwill should be attributed to Perch at the date of acquisition?

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  1. 13 August, 17:47
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    Answer: $120,000

    Explanation:

    Purchase Price for 80%) $1,600,000 - (FV $1,850,000 *.80 = $1,480,000) = $120,000
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