A and b companies have been operating separately for five

Reference no: EM13596237

A and B Companies have been operating separately for five years. Each company has a minimal amount of liabilities and a simple capital structure consisting solely of voting common stock. A Company, in exchange for 40 percent of its voting stock, acquires 80 percent of the common stock of B Company. This is a "tax-free" stock-for-stock (type B) exchange for tax purposes. B Company assets have a total net fair market value of $800,000 and a total net book value of $580,000. The fair market value of the A stock used in the exchange is $700,000 and the fair value of the noncontrolling interest is $175,000. What would the goodwill reported following the acquisition be? Please show calculations.

Reference no: EM13596237

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