Ocean Incorporated purchased all of the outstanding stock of Sea Star Company pa
ID: 2532940 • Letter: O
Question
Ocean Incorporated purchased all of the outstanding stock of Sea Star Company paying $950,000 cash. Ocean assumed all of the liabilities of Sea Star. Book values and fair values of acquired assets and liabilities were:
Book Value
Fair Value
Current assets (net)
$130,000
$125,000
Property, plant, equip. (net)
600,000
750,000
Liabilities
150,000
175,000
Ocean would record goodwill of:
A) $ 0.
B) $ 75,000.
C) $445,000.
D) $250,000.
Book Value
Fair Value
Current assets (net)
$130,000
$125,000
Property, plant, equip. (net)
600,000
750,000
Liabilities
150,000
175,000
Explanation / Answer
Calculate goodwill
so answer is d) 250000
Current asseets 125000 Property, plant and equipment 750000 Less: Liabilities -175000 Net assets value 700000 Purchase consideration -950000 Goodwill 250000Related Questions
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