On May 31, 2001, Cole Co paid $3,500,000 to acquire all of the common stock of H

Question

On May 31, 2001, Cole Co paid $3,500,000 to acquire all of the common stock of Hale Corporation, which became a division of Armstrong. Hale reported the following balance sheet at the time of the acquisition:

Current assets $900,000
Noncurrent assets 2,700,000
Total assets $3,600,000

Current liabilities $600,000
Long-term liabilities 500,000
Stockholder's equity 2,500,000
Total liabilities and S/E $3,600,000

It was determined at the date of purchase that the fair value of the total assets of Hall was $3,900,000.

Compute the amount of goodwill recognized if any on May 31, 2001.

My answer:
$3,500,000 - $3,900,000 = -$400,000
So goodwill is not recognized? Would there be a disclosure to the financial statements? Or just that goodwill is not recognized?

Explanation / Answer

goodwill=3500000-3600000=$-100000 there would be no disclosure of goodwill in financial statements.goodwill is not recognised

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