Bristle corporation acquired 75 percent of silver corporation's common stock on december 31, 20x8, for $300,000. the fair value of the noncontrolling interest at that date was determined to be $100,000. silver's balance sheet immediately before the combination reflected the following balances: cash and receivables$40,000inventory $70,000land $90,000buildings and equipment (net) $250,000total assets $450,000accounts payable $30,000income taxes payable $40,000bonds payable $100,000common stock $100,000retained earnings $180,000total liabilities and stockholders' equity $450,000a careful review of the fair value of silver's assets and liabilities indicated that inventory, land, and buildings and equipment (net) had fair values of $65,000, $100,000, and, $300,000 respectively. goodwill is assigned proportionately to bristle and the noncontrolling shareholders.1. based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet immediately following the acquisition? a. $0b. $120,000c. $65,000d. $20,000 c2. based on the preceding information, what amount will be reported as investment in silver corporation stock in the consolidated balance sheet immediately following the acquisition? a. $0b. $210,000c. $300,000d. $400,000 acan you explain and show me why those are the answer?

Answer

1. Goodwill = 65000

2. option A.

The answer of the exercise is attached in a microsof excel document.  

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.

2. In the consolidated balance sheet investment in silver corporation is eliminated in worksheet entries.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

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