On January I, 2010, Pluto Inc. acquired a 90% equity interest in Saturn Inc.

in exchange for $450,000

worth of Pluto stock. The fair market value of Saturn on the date of acquisition was $500,000. The
following information is available about the two companies inunediately prior to the transaction:
450,000
Please fill the highlighted cells
90% 405,000 450,000 + 90% × (85,000 – 50,000) = 463,500
Pluto Saturn Acquisition method 10% 45,000

Book Value ($) Book Value ($) Fair Value ($) Full Partial Full goodwill method formula:
Дансны үнэ Дансны үнэ Зах зээлийн үнэ Goodwill Goodwill

Cash and receivables 50,000 20,000 20,000 70,000 Goodwill = fair value of subsidiary – fair value of the subsidiary’s identifiable net assets
Inventory 130,000 95,000 95,000 225,000 Partial goodwill method formula:
Net PP&E 250,000 110,000 160,000 410,000 Goodwill = fair value of subsidiary – fair value of ownership of the subsidiary’s identifiable net assets
Goodwill 𝐶𝑎𝑟𝑟𝑦𝑖𝑛𝑔 𝑎𝑚𝑜𝑢𝑛𝑡 = 𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝑐𝑜𝑠𝑡 + 𝑆ℎ𝑎𝑟𝑒𝑠 𝑜𝑓 𝑝𝑜𝑠𝑡 𝑎𝑐𝑞𝑢𝑖𝑠𝑖𝑡𝑖𝑜𝑛 𝑖𝑛𝑐𝑜𝑚𝑒 −𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑟𝑒𝑐𝑒𝑖𝑣𝑒�
Total assets 430,000 225,000 275,000 705,000 (115,000)
Payables 60,000 25,000 25,000 85,000
Long-term debt 100,000 60,000 60,000 160,000 Partial Goodwill
Total liabilities 160,000 85,000 85,000 245,000 Purchase price $ 450,000.00
270,000 140,000 190,000 90% of fair value of subsidiary’s
Net assets 460,000 identifiable net assets $ 171,000.00
Goodwill $ 279,000.00 426,000.00
Capital stock 90,000 50,000 140,000
Noncontrolling interest (NCI) 410,000 Value of noncontrolling interest $ 19,000.00
Retained earnings 180,000 90,000 270,000
Total shareholders' equity 270,000 140,000 - 820,000 - Full Goodwill
Net PP&E $ 410,000.00
Subsidiary's fair value 500,000 500,000 500,000 Fair value of subsidiary $ 500,000.00
Fair value of subsidiary’s
Acquisition price 450,000 450,000 450,000 identifiable net assets $ 190,000.00
Fair value of subsidiary's identifiable net assets 190,000 190,000 190,000 Goodwill $ 310,000.00
Fair value of proportionate share of acquired net assets 171,000 171,000 171,000
Goodwill 310,000 279,000 31,000 The value of noncontrolling interest $ 50,000.00
Noncontrolling interest (NCI) 19,000 19,000
$ 31,000.00
Subsequent Income statements:
Sales 300,000 200,000 300,000 200,000 310,000
COGS 180,000 140,000 180,000 140,000
Interest expense 10,000 20,000 10,000 20,000
Depreciation expense 25,000 12,000 25,000 12,000
Income from continuing operation 85,000 28,000 85,000 28,000
Noncontrolling interest (10%) - - - -
Consolidated net income to parent's shareho 85,000 28,000 85,000 28,000
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Franklin Jeferson Acquisition method

Book Value ($) Book Value ($) Fair Value ($)

Full Goodwill Partial Goodwill
Дансны үнэ Дансны үнэ Зах зээлийн үнэ

Cash and receivables 10,000 300 300 10,300 10,300 -

Inventory 12,000 1,700 3,000 15,000 15,000 -
Net PP&E 27,000 2,500 4,500 31,500 31,500 -
Goodwill 9,600 0 0 9,600 -
Total assets 49,000 4,500 7,800 66,400 66,400 -
Current Payables 8,000 600 600 8,600 8,600 -
Long-term debt 16,000 2,000 1,800 17,800 17,800 -
Total liabilities 24,000 2,600 2,400 26,400 26,400 -
Net assets 25,000 1,900 5,400 40,000 40,000 -
-
Capital stock 5,000 400 6,000 6,000 -
Additional paid in capital 6,000 700 20,000 20,000 -
Retained earnings 14,000 800 14,000 14,000 -
Total shareholders' equity 25,000 1,900 40,000 0 0 40,000 -
Total liabilities and stockholders equity 66,400 66,400 -