Cougar Corporation has 50,000 shares outstanding, which have recently been trading for approximately $40 per share. Husky
Question:
Cougar Corporation has 50,000 shares outstanding, which have recently been trading for approximately $40 per share. Husky buys 90% of these shares on the open market, but in order to do so is required to pay and average cost of $45 per share.
After this acquisition, the 10% noncontrolling interest continues to trade at approximately $40 per share. At the date of the acquisition,
Cougar's net assets had a book value of $1.3 million. However, Cougar possessed various Intellectual Property that on this date had a fair value that was $200,000 in excess of book value.
Compute the total goodwill associated with this acquisition, and show how that amount would be allocated between the controlling and noncontrolling interests.
Fundamental Financial Accounting Concepts
ISBN: 978-0078025907
9th edition
Authors: Thomas Edmonds, Christopher Edmonds