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    Accounting for intangible assets

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    Mia-Tora Company purchased a fast-food resturant for $1,400,000. the fair market values of the assets purchased were as follows. No liabilities were assumed.

    Equipment $320,000
    Land $200,000
    Building $ 650,000
    Franchise (5-year life) $100,000


    Calculate the amount of goodwill purchased.

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    Solution Preview

    Goodwill will be calculated as follows:

    Given Cost of Investment = $ 1,400,000

    Fair Value of Assets acquired

    Equipment ...

    Solution Summary

    The solution calculates godwill for Mia-Tora Company a fast food restaurant.