Question
Arizona Corporation acquired the business Data Systems for $340,000 cash and assumed all liabilities at the date of purchase. Datas books showed tangible assets of
Arizona Corporation acquired the business Data Systems for $340,000 cash and assumed all liabilities at the date of purchase. Datas books showed tangible assets of $380,000, liabilities of $23,000, and stockholders equity of $357,000. An appraiser assessed the fair market value of the tangible assets at $330,000 and liabilities at $23,000 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 | |||||||||||
| 580,000 | + | NA | + | NA | = | NA | + | 580,000 | 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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Evaluating The K–12 Literacy Curriculum A Step By Step Guide For Auditing Programs Materials And Instructional Approaches
Authors: Colleen Pennell
1st Edition
0367203634, 978-0367203634
