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Woan Inc
Woan Inc. acquired 100% of the voting common stock of Franco Inc. on January 1, 2013. The book value and fair value of Franco's accounts on that date (prior to creating the combination) follow, along with the book values of Woan's accounts:
|
|
Woan |
Franco |
Franco |
|
|
Book |
Book |
Fair |
|
|
Value |
Value |
Value |
|
Retained earnings, 1/1/15 |
$250,000 |
$240,000 |
|
|
Cash and receivables |
170,000 |
70,000 |
$70,000 |
|
Inventory |
230,000 |
170,000 |
210,000 |
|
Land |
280,000 |
220,000 |
240,000 |
|
Buildings (net) |
480,000 |
240,000 |
270,000 |
|
Equipment (net) |
120,000 |
90,000 |
90,000 |
|
Liabilities |
650,000 |
430,000 |
420,000 |
|
Common stock |
360,000 |
80,000 |
|
|
Additional paid-in capital |
20,000 |
40,000 |
|
Assume that Woan issued 12,000 shares of common stock with a $5 par value and a $47 fair value to obtain all of Franco's outstanding stock. In this acquisition transaction, how much goodwill should be recognized?
Expert Solution
PFA
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