On September 1 2017 Blue Spruce Corporation acquired Tunneli

On September 1, 2017, Blue Spruce Corporation acquired Tunneling Limited for a cash payment of $949,500. At the time of purchase, Tunneling’s statement of financial position showed assets of $773,000, liabilities of $455,600, and owners’ equity of $317,400. The fair value of Tunneling’s assets is estimated to be $1,168,900.

Calculate the amount of goodwill acquired by Blue Spruce.

Goodwill acquired by Blue Spruce

$_____________

Solution

Purchase price $949,500 Fair value of assets $1,168,900 Fair value of liabilities $455,600 Fair value of net assets $713,300 Value assigned to goodwill $236,200