How much is consolidated goodwill

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On January 1, 2010 Adams pays $4 million cash to acquire 100% of baker in a transaction structured as an acquisition. At date of acquisition, Baker has book value of assets of $7 million and book value of liabilities of $4 million. In addition, Baker has land on its books with a book value of $800,000 and a fair value of $500,000.

Problem a. How much is consolidated goodwill.

Problem b. How does the answer to a above differ if Adams paid $2 million.

Problem c. Assume Adams pays $4 million cash and instead of Land, it is Notes Payable that has the as above fair value and book value. How much is consolidated goodwill.

Problem d. How does the answer to c, above differ if Adams paid $2 million.

Reference no: EM132984919

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