Perch Co Acquired 80% of the Common Stock of Float Corp

question 36

Multiple Choice

Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair value of Float's net assets was $1,850,000, and the book value was $1,500,000. The non-controlling interest shares of Float Corp. are not actively traded.
What amount of goodwill should be attributed to Perch at the date of acquisition?

• A) $150,000.
• B) $250,000.
• C) $0.
• D) $120,000.
• E) $170,000.

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Definitions:

Older Workers

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First In/First Out

An inventory management and valuation method where the first items produced or acquired are the first ones to be expended or sold.

Layoffs

The act of terminating employees, often for economic or business restructuring reasons, rather than individual performance issues.

Multicultural Organization

An organization that embraces diversity, promotes inclusivity, and integrates a variety of cultural perspectives into its operations and values.