Pace corporation acquired f spin companys common stock

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Reference no: EM13966138

Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition follow:

PACE

Cash $30,000,

Accounts receivable $80,000,

Inventory $150,000,

Land $65,000,

Buildings and Equipment $260,000 (less accumulated depreciation of $120,000,

Investment in Spin Company $150,000,

Accounts Payable $45,000,

Taxes payable $20,000,

Bonds Payable $200,000,

Common stock $50,000,

Retained earnings $300,000.

SPIN:

Cash $25,000,

Accounts Receivable $40,000,

Inventory, $55,000,

Land $40,000,

Buildings and equipment $160,000 (less accumulated depreciation $50,000,

Accounts Payable $33,000,

Taxes payable $8,000,

Bonds payable $100,000,

Common Stock $20,000,

Retained earnings $109,000.

At the date of the business combination, the book values of Spin's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000, and land, which had a fair value of $50,000. The fair value of land for Pace Corporation was estimated at $80,000 immediately prior to the acquisition. Based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet prepared immediately after the business combination?

		$0
		$21,000
		$6,000
		$15,000

Reference no: EM13966138

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