9) TIM PURCHASED 100% OF THE ASSETS AND LIAB OF SUE CORP.

PURCHASE PRICE= 875,000

SUE CORP'S BALANCE SHEET IMMEDIATELY PRIOR TO THE SALE IS AS FOLLOWS:

Cash 115,000 AP 35,000

AR 70,000 EQUITY 650.000

PPSE 500,000 TOTAL 685,000

TOTAL 685,000

TIM'S REVIEW OF SUE'S FINANCIAL DATA REVEALED THE FOLLOWING FAIR VALUE DATA:

PPSE 572,000

LICENSE 50,000 (UNRECORDED)

a. WHAT IS THE BOOK VALUE OF SUE CORP IMMEDIATELY PRIOR TO TIM'S PURCHASE? (5 POINTS)

b. HOW MUCH GOODWILL IS RECORDED AT THE TIME OF PURCHASE? (5 POINTS)