Reference no: EM132827898

Question - AAA acquired 100% of BBB Inc. on January 1, 2018. The value of "AAA's Investment in BBB Account" December 31, 2019

On that date, BBB's common shares and retained earnings were worth $90,000 and $60,000 respectively. On the date of acquisition, the Fair Value equaled book value for BBB's assets, except for Land. The Fair value of Land was $30,000 greater than book value as of was $225,000.

Other information:

During 2018, BBB's recorded net income loss from it's stand-alone Income statement was $7,000).

During 2018, BBB declared a dividend of $3,500.

During 2019, BBB's recorded net income from it's stand-alone Income statement was $31,000.

During 2019, BBB declared a dividend of $9,000.

Also, during 2019, it was professionally judged that there was a goodwill impairment of $1,000, which needs to be reflected on the consolidated income statement.

Required -

How do calculate initiate purchase price that AAA paid for BBB on January 1, 2018?

How do calculate goodwill on the date of acquisition?