Bristle Corporation acquired 75 percent of Silver Corporation's common stock on December 31, 20X8, for $300,000. The fair value
of the noncontrolling interest at that date was determined to be $100,000. Silver's balance sheet immediately before the combination reflected the following balances:Cash and Receivables$40,000Inventory $70,000Land $90,000Buildings and Equipment (net) $250,000Total Assets $450,000Accounts Payable $30,000Income Taxes Payable $40,000Bonds Payable $100,000Common Stock $100,000Retained Earnings $180,000Total Liabilities and Stockholders' Equity $450,000A careful review of the fair value of Silver's assets and liabilities indicated that inventory, land, and buildings and equipment (net) had fair values of $65,000, $100,000, and, $300,000 respectively. Goodwill is assigned proportionately to Bristle and the noncontrolling shareholders.1. Based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet immediately following the acquisition?A. $0B. $120,000C. $65,000D. $20,000Answer: C2. Based on the preceding information, what amount will be reported as investment in Silver Corporation stock in the consolidated balance sheet immediately following the acquisition?A. $0B. $210,000C. $300,000D. $400,000Answer: ACan you explain and show me why those are the answer?
