Northern Equipment Corporation purchased all the outstanding common stock of Pioneer Equipment Rental for $5,500,000 in cash.

Question:

Northern Equipment purchased all the outstanding of Pioneer Equipment Rental for $5,500,000 in cash. The book value of Pioneer's net assets (assets minus liabilities) was $3,900,000. The book values and fair values of Pioneer's assets and liabilities were:
.............................................Book Value .................Fair Value
Receivables ..................................$ 650,000 ..................$ 550,000
Property, plant, and equipment ............4,000,000..................4,700,000
...............................100,000 ....................600,000
Liabilities ......................................(850,000) ..................(850,000)
Net assets ....................................$3,900,000............... $5,000,000
Required:
1. Calculate the amount paid for goodwill.
2. Record Northern Equipment's acquisition of Pioneer Equipment Rental.
Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...