Compue consolidated goodwill: A. $360 B. $450 C. $460 D. $440 E. $475 The financ

Question

Compue consolidated goodwill:

A. $360

B. $450

C. $460

D. $440

E. $475

The financial balances for the Atwood Company and the Franz Company as of December 31, 2018, are presented below Also included are the fair values for Franz Company's net assets Atwood FranzCo . FranzCo . (all numbers are in thousands) Book valueBook value Fair value 12/31/2018 12/31/2018 12/31/2018 $240 Cash Receivables Inventories Land Buildings (net) Equipment (net) Accounts payable Accrued expenses Long-term liabilities Common stock ($20 par) Common stock ($5 par) Additional paid-in capital Retained earnings Revenues Expenses $870 600 420 260 540 380 (240) (60) 240 600 580 250 650 400 (240) (60) 660 1,230 1,800 1,800 660 (570) (270) (2,700) (1,980) (1,020) (1,120) (210) (1,170) (2,880) (420) (180) 480) (660) 620 2,760 Note: Parenthesis indicate a credit balance Assume an acquisition business combination took place at December 31, 2018. Atwood issued 50 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Franz. Stock issuance costs of $15 (in thousands) and direct costs of $10 (in thousands) were paid

Explanation / Answer

Answer b. $450 Cost Paid = 50 Shares X $35     1,750.00 Fair Market Value - Net Assets     1,300.00 Goodwill         450.00 Cash         240.00 Receivables         600.00 Inventories         580.00 Land         250.00 Building         650.00 Equipment         400.00 Accounts Payable       (240.00) Accrued Expense         (60.00) Long Term Liabilities (1,120.00) FMV - Net Assets     1,300.00

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