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At the beginning of fiscal 2014, Standard Rate Company acquired a small savings and loan association for $68 million. The book value of the assets of the acquired company were $174 million, its liabilities $115 million. An appraiser determined that the acquiree's land had a fair value of $2 million in excess of its net book value. Standard Rate also determined that the acquiree had an unrecorded liability of $4.5 million relating to a lawsuit. The book value of all other assets and liabilities approximated fair value. What did Standard Rate Company record as goodwill for this acquisition

Sagot :

Answer:

$11,500,000

Explanation:

Particulars                                                                       Amount'million

Book value of the assets of the acquired company       $174

Add: Fair value in excess of its net book value               $2

Less: Liabilities                                                                   $115

Less: Unrecorded liability relating to a lawsuit                $4.50

Less: Acquisition Cost of the company                            $68    

Goodwill                                                                              $11.50