Question
Arizona Corp. acquired the business Data Systems for $325,000 cash and assumed all liabilities at the date of purchase. Datas books showed tangible assets of
Arizona Corp. acquired the business Data Systems for $325,000 cash and assumed all liabilities at the date of purchase. Datas books showed tangible assets of $350,000, liabilities of $20,000, and stockholders equity of $330,000. An appraiser assessed the fair market value of the tangible assets at $315,000 at the date of acquisition. Arizona Corp.s financial condition just prior to the acquisition is shown in the following statements model:
| Assets | = | Liab. | + | Equity | Rev. | Exp. | = | Net Inc. | Cash Flow | ||||||
| Cash | + | Tang. Assets | + | Goodwill | |||||||||||
| 550,000 | + | NA | + | NA | = | NA | + | 550,000 | NA | NA | = | NA | NA | ||
Required: a. Compute the amount of goodwill acquired. b. Record the acquisition in a financial statements model like the preceding one. d. Record the acquisition in general journal format.
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Essentials Of Xbrl Financial Reporting In The 21st Century
Authors: Bryan Bergeron
1st Edition
0471220779, 978-0471220770
