Hat Ltd purchase the Cat Store for the consideration of: Cash: 950000, Land of Hat Ltd is going to transfer the title of the land to the owners of the Cat store( the carrying amount of the land is 120000; fair value is 295000) The Statement of financial position of the Cat Store as at the date of acquisition shows assets of 290000 and liabilities of 95000. All assets are fairly valued except the Cat Store's building, which is in the financial statement at 60000 but has a fair value of 85000. There are no contingent liabilities. Require: Calculate the amount of goodwill.

The amount of goodwill from the Hat Ltd purchase of the Cat Store is calculated to be $1,025,000. This is determined by adding the cash consideration and fair value of the land, adjusting the fair value of the assets, subtracting the liabilities, and finding the excess of the purchase consideration over the net assets at fair value.

To calculate the amount of goodwill in the Hat Ltd purchase of the Cat Store, we follow the steps of identifying the purchase consideration, fair value adjustments, and then determining the goodwill according to accounting standards.

Calculate total purchase consideration, which includes cash and the fair value of the land transferred:

Cash: $950,000

Land: Fair value of $295,000

Total purchase consideration = $950,000 + $295,000 = $1,245,000.

Identify the fair value of the Cat Store's net assets: Assets are $290,000; however, the building needs a fair value adjustment:

Building's book value: $60,000

Building's fair value: $85,000

Adjustment to building's value: $85,000 - $60,000 = $25,000

Fair value of Cat Store's assets = $290,000 + $25,000 = $315,000.

Subtract the liabilities to find the net assets at fair value:

Liabilities: $95,000

Net assets at fair value = $315,000 - $95,000 = $220,000.

Goodwill is the excess of purchase consideration over fair value of net assets acquired:

Goodwill = Total purchase consideration - Net assets at fair value

Goodwill = $1,245,000 - $220,000 = $1,025,000.

Therefore, the amount of goodwill from the Hat Ltd purchase is $1,025,000.