On April $30,2023,$ Dent Corpora$($on acquired for cash all $200,000$ shares of the

outstanding common stock of Wendt Company, for $$20$ per share. At April $30,$

$2023,$ Wendt$$s balance sheet showed net asses with a $$3$ million book value. On

that date, the fair value of Wendt$$s PPE exceeded book value by $$300,000.$

Required:

What amount should Dent report as goodwill on its April $30,2023$ consolidated

balance sheet?

SOLUTION:

Acquisi$($on cost of Wendt$$s stock

Book value of Wendt$$s stock

Excess over book value

Alloca$6$on of excess cost over book value:

Total alloca$($on of excess cost over book value