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1-Arlington, Inc. purchases all of the common stock of Frisco Company for $450,000 cash. At the acquisition date, Frisco's stockholders' equity consisted of Common Stock,
1-Arlington, Inc. purchases all of the common stock of Frisco Company for $450,000 cash. At the acquisition date, Frisco's stockholders' equity consisted of Common Stock, $300,000, and Retained Earnings, $20,000. It was determined that the investee's balance sheet included land undervalued by $30,000 and equipment undervalued by $5,000. Arlington estimates a 10-year life for any goodwill. Required: a. What is the amount of goodwill recorded at date of acquisition? b. What is the balance in goodwill one year after acquisition, if the company is a private company
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