On January 1, 2011, Timothy Company purchased Macys Company at a price of $3,750,000 The fair market value of the net assets purchased equals $2,700,000 1 What is the amount of goodwill that Timothy records at the purchase date 2 Explain how Timothy would determine the amount of goodwill amortizati...

1 Goodwill 3750000 2700000 1050000 2 Goodwill is not amorti ...

On January 1, 2011, Timothy Company purchased Macys Company at a price of $3,750,000. The fair market

Question:

On January 1, 2011, Timothy Company purchased Macys Company at a price of $3,750,000. The fair market value of the net assets purchased equals $2,700,000.
1. What is the amount of that Timothy records at the purchase date?
2. Explain how Timothy would determine the amount of amortization for the year ended December 31, 2011.
3. Timothy Company believes that its employees provide superior customer service, and through their efforts, Timothy Company believes it has created $1,350,000 of . How would Timothy Company record this ?

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...