Question: Assume that Company R acquired as a long term investment
Assume that Company R acquired, as a long- term investment, 30% of the out-standing voting common shares of Company S at a cash cost of $ 100,000. At the date of acquisition, Company S reported net assets and total shareholders’ equity of $ 250,000. The fair value of the depreciable assets of Company S was $ 20,000 greater than their net book value at the date of R’s acquisition. Compute goodwill purchased, if any.
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