Amount of goodwill or negative goodwill

Assignment Help Finance Basics
Reference no: EM132607563

Fry Ltd purchased 80% of the shares in Lawrie Ltd on 1 July 2020, for a cash consideration of $381,000. On that date, the equity balances of Lawrie Ltd were: Share Capital $200,000 Retained Earnings $100,000 General Reserve $60,000 All of the identifiable net assets were recorded at their fair value in the books of Lawrie Ltd, except for: Inventory Carrying amount of $60,000; Fair value of $80,000 Equipment Carrying amount of $55,000; Fair value of $65,000 The Company Tax rate is 30%. Using the partial goodwill method, calculate the amount of goodwill or negative goodwill pertaining to this business combination: Select one:

a. Goodwill of 0.

b. Negative goodwill of $76,200.

c. Goodwill of $76,200.

d. Negative goodwill of $9,000.

e. None of the options (i.e. the goodwill value is something else).

Reference no: EM132607563

Questions Cloud

Appropriate entry for p limited to record dividend : Which of the following is the appropriate entry for P Limited to record this dividend?
Find out the profit maximizing product mix : During July 20X2 the available direct labor is limited to 8,000 hours. Find out the profit maximizing product mix
Venture capital as startup funding for a business : You are a business consultant who works with new business owners. A new client wants to start a bakery and seeks your advice.
Evaluation and re-design of organizational structures : Examine analysis objectives for evaluation and re-design of organizational structures. Define what steps you could take to overcome this resistance to change.
Amount of goodwill or negative goodwill : Calculate the amount of goodwill or negative goodwill pertaining to this business combination:
ITECH2305 Analysing the Modern Business Assignment : ITECH2305 Analysing the Modern Business Assignment Help and Solution, Federation University - Assessment Writing Service
Describe the process of inventory management : Describe the process of inventory management and how it impacts/related to the role of a healthcare manager?
Cloud reference architecture and cloud computing framework : What are some differences between a Cloud Reference Architecture and a Cloud Computing Framework,
Calculate operating cashflow for the year : Depreciation expense has increased significantly in 2020. In a brief sentence or two explain why may have occurred. Calculate Operating Cashflow for year 2020

Reviews

Write a Review

Finance Basics Questions & Answers

  Is a treasury bond issued 29 years ago with 6 months

is a treasury bond issued 29 years ago with 6 months remaining before it matures a money market

  What is the after-tax salvage value

ABC Company purchased $89,196 of equipment 5 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $8,897.

  Personal financial planning

John inherited $2 million in an IRA, which comprised of the entire estate from his father. He promptly withdrew the funds. The appropriate marginal tax rate was 28%.

  Sketch the income-leisure budget constraint

Food stamp benefits are phased out in a complicated fashion that varies from state to state, However, at some point near the poverty line, food stamps worth.

  Price of a two-year european call option

What, to the nearest cent, is the lower bound for the price of a two-year European call option on a stock when the stock price is $20, the strike price is $15, and the risk-free interest rate with continuous compounding is 5% and there are no divi..

  Use synthesized attributes to determine

Let synthesized attribute val give the value of the binary number generated by S in the following grammar. For example, on input 101.101. S.val = 5.625

  Design and distribution of the issue

The out-of-pocket expenses incurred by Security Brokers in the design and distribution of the issue were $280,000. What profit or loss would Security Brokers in

  Determine its cost of equity capital

Phillip Enterprises Inc. needs to determine its cost of equity capital.

  Accumulate money for down payment

How much money should he place today in a saving account that earns 6.63 percent per year (compounded daily) to accumulate money for his down payment?

  Advantages and disadvantages of distance learning

As Capella learners, you have likely formed your own opinions regarding the advantages and disadvantages of distance learning.

  What is the expected annual cost of the complete system

New Wave Surfing Stuff Inc. is a manufacturer of surfboards and related gear that sells to exclusive surf shops located in several Atlantic and Pacific.

  Performed in work settings

What are the tasks or abilities that you need to be skilled in if you are studying Finance, and how will they need to be performed in work settings?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd