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Prepare the analysis to substantiate goodwill if any

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Reference no: EM132463279

Question 1. Pardata purchased all of the shares of Subco for $30 million in cash. The balance sheets of Pardata and Subco just after the acquisition appear below, along with fair value information for Subco's net assets.

                               Pardata                   Subco

                           Book Value              Book Value                          Fair Value

Dr (Cr)

Current assets         $ 10,000,000              $ 5,000,000                   $ 4,000,000

Plant assets               40,000,000               36,000,000                   25,000,000

Identifiable intangible assets

  • 10,000,000

Investment in Subco

  • 30,000,000

Liabilities                    (35,000,000)         (37,800,000)                      (37,500,000)

Capital stock

                                   (30,000,000)                                             (5,000,000)

Retained earnings            (15,600,000)                                                 1,500,000

Treasury stock                     100,000                                                     100,000

Accumulated other comprehensive loss               500,000                             200,000

Total                                  $ 0                                                                   $ 0

Problem a) Prepare the analysis to substantiate goodwill, if any. Clearly label all numerical values.

Reference no: EM132463279

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