Reference no: EM132525973

Question - PLTO Ltd. is considering purchasing the net assets of Shamrock Corporation. Following is the statement of financial position of Shamrock as at December 31, 2020:

Shamrock Corporation Statement of Financial Position

As at December 31, 2020

Current assets $229,400

Buildings and equipment 758,000

Accumulated depreciation (114,000)

Land 179,000

Total assets $1,052,400

Current liabilities $ 190,000

Common shares 576,000

Retained earnings 286,400

Total equities $1,052,400

Following are the fair values for Shamrock's net assets, as at December 31, 2020:

Current assets $223,500

Building and equipment 486,000

Land 319,500

Current liabilities (169,000)

$860,000

Required - Calculate the value of goodwill that would be acquired by PLTO if it offered $1,905,000 for the net assets of Shamrock.