On December 31, X Co. acquires 100% of Y Co. by exchanging 10,000 shares of its common
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On December 31, X Co. acquires 100% of Y Co. by exchanging 10,000 shares of its common stock (5 $ par value, 77 $ market value) for all of the common stock of Y Co., which will remain in existence as a wholly-owned subsidiary of X Co. On the date of the acquisition, the book value of Y Co. is 600,000 $. X Co. believes that Y Co.’s property, plant, and equipment are undervalued by 20,000 $ and its long-term liabilities are overvalued by 30.000 $. What is the goodwill in this transaction?
- a. 100.000 $
- b. 120.000 $
- c. 160.000 $
- d. 180.000 $
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