On June 1, Cline Co. paid $967,000 cash for all of the issued and outstanding co

Question

On June 1, Cline Co. paid $967,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying amounts for Renn's assets and liabilities on June 1 follow Cash Accounts receivable Capitalized software costs Goodwill Liabilities Net assets s 180,000 209,000 365,000 170,000 (174,000) $ 750,000 On June 1, Renn's accounts receivable had a fair value of $158,000. Additionally, Renn's in-process research and development was estimated to have a fair value of $237000. All other items were stated at their fair values. On Cline's June 1 consolidated balance sheet, how much is reported for goodwill? Multiple Choice $365,000. $20,000. $201000 $150,000

Explanation / Answer

Consideration transferred (fair value) 967000 Cash 180000 Accounts receivable 158000 Software 365000 Research and development asset 237000 Liabilities -174000 Fair value of net identifiable assets acquired 766000 Goodwill 201000 (967000-766000) Option 3 is correct

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