Question

At the date of the business combination, the book values of Spice’s assets and liabilities approximated fair value except for inventory, which had a fair value of, and land, which had a fair value of

Answer 1

Answer:

$830,000.

Explanation:

Step one: determine or Calculate the total number of assets.

Total number of assets = Retained Earnings + inventory(spice) + cash + land fair value + inventory (pumpkin)

Total number of assets = 180,000 + 25,000 + 15,000 + 95,000 + 30,000 = $345,000.

Step two : Calculate or determine the total liabilities.

Total liabilities = retained earnings + bonds payable + Account payable (pumpkin) +

Total liabilities = 180,000 + 40,000 + 10,000 = $230,000.

Step three: determine the value for the total amount of goodwill.

Total amount of Goodwill = A - B

Where A = paid consideration + non controlling interest fair value.= $(210000 + 90000) = $300, 000.

B= acquired Assets - assumed liabilities. = $(345,000 - 230,000) = $115,000.

Total amounts of Goodwill = A - B = $185,000.

Step four: determine the consolidated sheet;

185,000 + 95,000 + 65,000 + 360,000 + 30,000 + 95,000 = $830,000.