Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Company A purchases Company B. This is a 100% equity purchase which means that Company A acquires all of the Company B assets and assumes

image text in transcribed

Company A purchases Company B. This is a 100% equity purchase which means that Company A acquires all of the Company B assets and assumes the liabilities of Company B. Calculate the value of goodwill recognized in the acquisition. Round to the nearest whole dollar and do not include the dollar sign ($). Assume the current market value of tangible physical assets is $1,234,567 (determined by Company A as at the acquisition date) the current market value of the only identifiable intangible asset (a customer list) is $125,000 (determined by Company A as at the acquisition date) Operating (non-Financial) liabilities have an appraised value of $160,000 before and after the acquisition. Financial Liabilities were appraised by company B to be valued at $600,000 immediately Before the acquisition. Financial Liabilities were appraised by Company A to be valued at $495,000 immediately After the acquisition. . There are no other assets or liabilities to consider than those presented above . Company A paid $812,000 cash for Company B

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Financial Management

Authors: Haim Levy, Marshall Sarnat

1st Edition

0137097751, 978-0137097753

More Books

Students also viewed these Finance questions

Question

Describe the variable costs of starting a business.

Answered: 1 week ago