Calculating goodwill assets
Acme Corporation is buying all the assets and assuming all the liabilities of Stark Inc. The following information is available for Stark Inc. at the date of the purchase:
Accounts Receivable 300,000
Inventory 100,000
Equipment 200,000
Accumulated Depreciation 80,000
Land 300,000
Accounts payable 40,000
Wages Payable 10,000
Note Payable 100,000
Common Stock 300,000
Retained Earnings 270,000
The inventory is worth $60,000, the land is worth $400,000 and the equipment is worth $300,000. Everything else is worth its book value. Acme Corporation will pay $1,000,000 for Stark Inc. How much of the purchase price will Acme Corporation debit to goodwill?
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Accounts Receivable 300,000
Inventory 60,000
Equipment 300,000
Land 400,000
Accounts Payable 40,000
Wages Payable 10,000
Note Payable 100,000
Cash 1,000,000
Goodwill 90,000
Acme Corporation will debit 90,000 to goodwill.
© BrainMass Inc. brainmass.com December 24, 2021, 11:55 pm ad1c9bdddf>https://brainmass.com/business/accounting/calculating-goodwill-assets-619977