Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 3, 2021, madison corp. purchased 30% of

On January 3, 2021, Madison Corp. purchased 30% of the voting common stock of Huntsville...

90.2K

Verified Solution

Question

Accounting

On January 3, 2021, Madison Corp. purchased 30% of the voting common stock of Huntsville Co., paying $3,000,000. Madison decided to use the equity method to account for this investment. At the time of the investment, Huntsvilles total stockholders equity was $8,000,000. Madison gathered the following information about Huntsvilles assets and liabilities:

Book Value Fair Value
Buildings (10-year life) $ 400,000 $ 600,000
Equipment (5-year life) 1,200,000 1,400,000
Franchises (8-year life) $ 0 $ 480,000

For all other assets and liabilities, book value and fair value were equal. Any excess of cost over fair value was attributed to goodwill, which has not been impaired. What is the amount of goodwill associated with the investment?

A) $600,000. B) $264,000. C) $0. D) $336,000. E) $480,000.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Physics
1.2K views

6. Solve parts a and b: A box is at rest on a horizontal, frictionless table. a....

Mechanical Engineering
1.2K views

2. Two different hardening processes, (1) saltwater quenching and (2) oil quenching, are used on samples...

Psychology
1.2K views

The Christian worldview provides an explanation for human nature and the story of the creation and...

Advance Math
1.2K views

Use the Laplace transform to solve the given initial-value problem. y'' ? 7y' = 12e6t ? 6e?t,    y(0) =...

Physics
1.2K views

116 The position x of a particle varies with time t as 4 X 3...

Basic Math
1.2K views

Given that A represents the event that someone likes dogs find P A The probability...

Accounting
1.2K views

Activity-Based Costing and Conventional Costs Compared Chef Grill Company manufactures two types of cooking grills:...

Accounting
1.2K views

La informacin del estado de resultados de Einsworth Corporation es la siguiente: Ventas $424 000...

Accounting
1.2K views

Exercise 8-21A (Algo) Computing and recording the amortization of intangibles LO 8-10, 8-11\ Dynamo Manufacturing...

Accounting
1.2K views

P-F:11-31B Computing and journalizing payroll amounts Lee Werner is general manager of Worldwide Salons. During...

Accounting
1.2K views

Given the following data, what is the cost of purchases? $370,000 $465,000 $595,000 $475,000

Finance
1.2K views

DB2-1 Useful websites for TVM calculations There are plenty of websites that assist in calculating...