Question

Assume that you are charged with assigning fair values related to a 1,375,000 acquisition. The book...

Assume that you are charged with assigning fair values related to a 1,375,000 acquisition. The book value of the net identifiable assets is 525,000. The fair value of the net recorded assets is 632,500. There is an unrecorded patent of 395,000. How much goodwill will be recorded during the consolidation process?
The answer is 297500, can you tell me how to get that answer?

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Answer #1
Acquistion =        1,375,000
Less:
Fair value of recorded Net assets            632,500
Fair value of unrecorded Patents            395,000
Goodwill            347,500

Goodwill should be recognised at 347,500 as per figures reported in the problem and if you are sure about the answer please replace current figure with correct figures as the solution that has been provided is correct.

Please like the solution if satisfied and if any query please mention it in comments so i can help accordingly...thanks

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