Pacific Inc. acquires all of the voting stock of Skye Company for $360 in cash. Skye’s balance sheet at the date of acquisition is as follows:

                                

Skye Company
Assets		Liabilities & equity
Current assets	$ 75	Current liabilities	$ 80
Land, buildings & equipment, net	1,580	Long-term liabilities	1,500
		Capital stock	100
		Retained earnings	5
		Accumulated other comprehensive loss	(10)
		Treasury stock	(20)
Total assets	$1,655	Total liabilities & equity	$1,655

 

Skye’s land, buildings & equipment have a fair value of $1,000. Skye’s other assets and liabilities are reported at amounts that approximate fair value. Skye has unreported identifiable intangibles with a fair value of $350 that meet the criteria for capitalization.

On the date of acquisition consolidation working paper, eliminating entry (R) includes a debit to goodwill in the amount of:

Select one:

a. $285

b. $505

c. $495

d. $515

Answer rating: 100% (QA)

To calculate the amount of goodwill to be recognized in the consolidation working paper we need to c... View the full answer