How much goodwill will be reported on the balance sheet

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Question - On 1/1/X, Palm Company acquired 90,000 shares (90% interest) in Soso Company for $6 per share. At the time, Soso's equity included $200,000 of Capital Stock and $300,000 of Retained Earnings. An Appraisal of Soso's assets provided the following information:

 

Account Fair Value

Book Value

Equipment (10 years)

100,000

90,000

Inventory

90,000

85,000

Patent (10 years)

20,000

-

Land

70,000

50,000

Required - How much Goodwill will be reported on the Consolidated Balance Sheet on 12/31/X1?

a. $0

b. $40,500

c. $45,000

d. None of the Above

Reference no: EM132535194

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