On January 1 , 2 0 2 3 , Parrots Parties Company purchased all of the common stock of Sunshine Company for $ 8 5 0 , 0 0 0 cash On that date, Sunshine had common stock of $ 6 0 , 0 0 0 , additional paid in capital of $ 3 6 0 , 0 0 0 , and retained earnings of $ 3 0 0 , 0 0 0 The difference between ...

To compute the excess of the acquisition price over the book value of Sunshines net assets and calcu ...

On January 1 , 2 0 2 3 , Parrots & Parties Company purchased all of

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On January $1, 2023,$ Parrots & Parties Company purchased all of the common stock of Sunshine Company for $ $850, 000$ cash. On that date, Sunshine had common stock of $ $60, 000,$ additional paid $-$ in capital of $ $360, 000,$ and retained earnings of $ $300, 000 .$ The difference between the cost of the purchase and the book value of Sunshine $’$ s net assets was at least partly due to under or overvalued assets and liabilities. Inventory was undervalued by $ $10, 000 .$ Land was undervalued by $ $70, 000 .$ Buildings and Equipment were undervalued by $ $18, 000 .$ Bonds Payable was overvalued by $ $15, 000 .$ Any unexplained difference is due to Goodwill.
Required:
Compute the excess of acquisition price over book value of Sunshine $’$ s net assets $(3$ points $)$ Calculate goodwill recorded by Parrots & Pirates related to the acquisition of Sunshine