Question: # 3 (Goodwill combination - full method) Lemon Corp. acquired 75% shareholding in Strawberry Corp. for $20 million. Book value of net identifiable assets of

# 3 (Goodwill combination - full method)

Lemon Corp. acquired 75% shareholding in Strawberry Corp. for $20 million. Book value of net identifiable assets of Strawberry B $14 million.

The fair value of Company Strawberrys asset is the same as their book value except accounts receivables which are impaired by $1 million.

Book value of assets is $54 million while book value of liabilities is $40 million

The first input that we need for calculation of goodwill under full goodwill method is the equals $14 million minus $1 million on account of impairment of accounts receivable. Goodwill under full goodwill method is hence $13.67 million.

Task: Compute the goodwill

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