Goodwill (Learning Objective 6) 15–20 min.

When one media company buys another, goodwill is often the most costly asset acquired.

TXL Publishing paid $925,000 to acquire the Thrifty Nickel, a weekly advertising paper. At the time of the acquisition, the Thrifty Nickel’s balance sheet reported total assets of $1,150,000 and liabilities of $375,000. The fair market value of the Thrifty Nickel’s assets was $1,225,000. The fair market value of liabilities was $375,000.

How much goodwill did TXL Publishing purchase as part of the acquisition of the Thrifty Nickel? Journalize TXL Publishing’s acquisition of the Thrifty Nickel.

AppendixLO1