On January 1, 2018, Lime acquired 80,000 common shares of Stone's for $900,000. On that day, Stone's balance sheet showed the following shareholders' equity: $ 2 Cumulative preferred shares, 20,000 shares issued $120,000 Common stock, 100,000 shares issued $500,000 Retained Earnings $50,000 Total Equity $670,000 * Stone's preferred share dividends were two years in arrears on that date. Stone's Fair Values approximated its book values on that date with the following exceptions: Inventory had a fair value that was $30,000 higher than its book value. Plant and equipment had a fair value $10,000 lower than their book value. The plant and equipment had an estimated remaining useful life of 10 years from the date of acquisition. Required: Compute the amount of Goodwill on the date of the acquisition

Answer rating: 100% (QA)

Answer To compute the amount of goodwill on the date of acquisition we need to follow these steps ... View the full answer