Question
Vasquez Manufacturing Company decided to expand further by purchasing Wasserman Company. The balance sheet of Wasserman Company as of December 31, 2015 was as follows:
Vasquez Manufacturing Company decided to expand further by purchasing Wasserman Company. The balance sheet of Wasserman Company as of December 31, 2015 was as follows:
Wasserman Company
Balance Sheet
December 31, 2015
Assets Liabilities and Equities
Cash $210,000 Accounts payable $375,000
Receivables 550,000 Common stock 800,000
Inventory 275,000 Retained earnings 885,000
Plant assets (net) 1,025,000
Total assets $2,060,000 Total liabilities and equities $2,060,000
An appraisal, agreed to by the parties, indicated that the fair value of the inventory was $370,000 and that the fair value of the plant assets was $1,325,000. The fair value of the receivables is equal to the amount reported on the balance sheet. The agreed purchase price was $2,275,000, and this amount was paid in cash to the previous owners of Wasserman Company.
Required:
Determine the amount of goodwill (if any) implied in the purchase price of $2,275,000.
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
15th edition
978-1118159644, 9781118562185, 1118159640, 1118147294, 978-1118147290
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