Lowell Corporation paid $80,000 to acquire all of Boston Company's net assets. Boston reported assets with a book value of $60,000 and fair value of $98,000 and liabilities with a book value and fair value of $23,000 on the date of combination. Lowell also paid $3,000 to a search firm for finder's fees related to the acquisition. What amount will be recorded as goodwill by Lowell Corporation while recording its investment in Boston

Lowell Corporation

The amount that will be recorded as goodwill by Lowell Corporation to record its investment in Boston is:

= $5,000.

Explanation:

a) Data and Calculations:

Investment in Boston Company = $83,000

Fair value of assets = $98,000

Fair value of liabilities  23,000

Net value of assets = $75,000

Goodwill = $5,000 ($80,000 - $75,000)

b) Acquired Goodwill is the difference between the cost of purchasing Boston Company ($80,000) and the net identifiable assets of Boston Company ($75,000).  The net identifiable assets are calculated by subtracting the fair value of the liabilities from the fair value of the assets.

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answer; schedule c;