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Arizona Corporation acquired the business Data Systems for $300,000 cash and assumed all liabilities at the date of purchase. Datas books showed tangible assets of
Arizona Corporation acquired the business Data Systems for $300,000 cash and assumed all liabilities at the date of purchase. Datas books showed tangible assets of $300,000, liabilities of $15,000, and stockholders equity of $285,000. An appraiser assessed the fair market value of the tangible assets at $290,000 and liabilities at $15,000 at the date of acquisition. Arizona Corporations financial condition just prior to the acquisition is shown in the following statements model.
Balance Sheet Income Statement
Assets = Liabilities + Stockholders Equity Revenue Expenses = Net Income Statement of Cash Flows
Cash + Tangible Assets + Goodwill
500,000 + NA + NA = NA + 500,000 NA NA = NA NA
Required
Compute the amount of goodwill acquired.
Record the acquisition in a financial statements model. Arizona Corporations financial condition just prior to the acquisition is shown in the financial statements model.
Record the acquisition in general journal format.
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