Answer:
a) $2,550,000
b) $1,550,000
c)$1,000,000
d) Goodwill is $50,000
Explanation:
Part A) Determine the total Assets of the business to be used in the consolidated balance sheet
The consolidated Total Asset for Dish Corporation and Toll Company is as follows:
The Book value of the assets of Dish + Toll's assets fair value + The goodwill
How to calculate the goodwill
First, dish paid the following for acquiring Toll = $10,000 @ $60 = $600,000
Secondly, The net worth of Toll at the time was = $1,300,000- $750,000 (Assets- Liabilities)= $550,000
The Good will = $600,000- $550,000
= $50,000
<u>Calculate Consolidated Asset</u>
The Book value of the assets of Dish + Toll's assets fair value + The goodwill
= $1,200,000 + $1,300,000 + $50,000 = $2,550,000
Part b) Total Liabilities
The book value of Dish Corporation Liabilities + The Fair value of Toll Liabilities
= $800,000 + $750,000 = $1,550,000
Part c) The total or consolidated Equity =
The formula for equity at this point = The Total Assets (Part A) - The Total Liabilities (Part b)
= $2,550,000 - $1,550,000
=$1,000,000
