Question

Bryer Co. purchases all of the assets and liabilities of Stellar Co. for $1,500,000. The fair value of Stellar’s assets is $2,000,000, and its liabilities have a fair value of $1,200,000. The book value of Stellar’s assets and liabilities are not known. For what amount would Bryer record goodwill associated with the purchase?

Multiple Choice

$800,000.


$500,000.


$700,000.


$0.

Answer 1

Answer:

700.000

Explanation:

Good will: Purchase price - Fair value of identifiable net assets

Fair value of identifiable net assets : 2,000,000-1,200,000=800,000

Good will : 1,500,000-800,000=700,000

Answer 2

The amount that should be recorded as goodwill is $700,000.

Given that,

• The purchases all of the assets and liabilities of Stellar Co. for $1,500,000.
• The fair value of Stellar’s assets is $2,000,000, and its liabilities have a fair value of $1,200,000.

Based on the above information, the calculation is as follows:

= Consideration paid - Net assets fair value  

= $1,500,000 - ($2,000,000 - $1,200,000)

= $700,000

Therefore we can conclude that the amount that should be recorded as goodwill is $700,000.

Learn more: brainly.com/question/13848560