Answer:
Amount paid for goodwill is $24,900
Explanation:
Note: The data in the question are merged and they first sorted before answering the question as follows:
Book Value Fair Value
Current assets $ 28,700 $ 22,300
Property, plant, and equipment 47,800 52,600
Other assets 3,500 5,800
Current liabilities 15,100 14,900
Long-term liabilities 29,000 21,400
The explanation of the answer to the question are now provided as follows:
Generally, goodwill refers to an intangible asset of a company and it can be in different for such as intellectual property, brand, commercial secrets, and reputation.
Amount paid for goodwill of an acquired company can be estimated by deducting the fair value of net identifiable assets acquired from the consideration paid.
For this question, fair value of net identifiable assets can be calculated as follows:
<u>Particular Fair Value ($) </u>
Current assets 22,300
Property, plant, and equipment 52,600
Other assets 5,800
Current liabilities (14,900)
Long-term liabilities <u> (21,400) </u>
Fair value of net asset <u> 44,400 </u>
Therefore, we have:
Amount paid for goodwill = Cash consideration paid - Fair value of net asset = $69,300 - $44,400 = $24,900
