Acquired 80% of the common stock of grunt corp. for $1,200,000. the fair value of grunt’s net assets was $850,000, and the book value was $600,000. the non-controlling interest shares of grunt corp. are not actively traded. what is the total amount of goodwill recognized at the date of acquisition?

total amount of goodwill recognized at the date of acquisition is 650000

Explanation:

given data

ownership = 80%

common stock = $1,200,000

net assets = $850,000

book value = $600,000

to find out

total amount of goodwill recognized at the date of acquisition

solution

we know here goodwill of controlling interest is

goodwill of controlling interest = common stock - ( net asset × ownership )

put here value

goodwill of controlling interest =  1,200,000 - ( 850,000 × 80% )

goodwill of controlling interest = 520000

and total amount of goodwill recognized at the date of acquisition

will be

total amount  =  

total amount  =   = 650000

so total amount of goodwill recognized at the date of acquisition is 650000

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is this good enough?

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