D is corrent. Per ASC Topic 810, in an acquisition of another company, goodwill is recorded as the difference between the cost of the acquired company plus the fair value of noncontrolling interests plus the acquisition date fair value of previously held interests in the acquiree less the fair value of its net identifiable assets. The cost of Perch Company is $7,500,000 (300,000 shares x $25), and the fair value of its net assets is $6,800,000 ($6,000,000 + $800,000). Thus, the resulting goodwill from this transaction will be $700,000 ($7,500,000 - $6,800,000).
A is incorrect. Per ASC Topic 810, in an acquisition of another company, goodwill is recorded as the difference between the cost of the acquired company plus the fair value of noncontrolling interests plus the acquisition date fair value of previously held interests in the acquiree less the fair value of its net identifiable assets.
A is incorrect. Per ASC Topic 810, in an acquisition of another company, goodwill is recorded as the difference between the cost of the acquired company plus the fair value of noncontrolling interests plus the acquisition date fair value of previously held interests in the acquiree less the fair value of its net identifiable assets.
A is incorrect. Per ASC Topic 810, in an acquisition of another company, goodwill is recorded as the difference between the cost of the acquired company plus the fair value of noncontrolling interests plus the acquisition date fair value of previously held interests in the acquiree less the fair value of its net identifiable assets.
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