Exercise 10-7 (Static) Goodwill [LO10-1]

Janzen Corporation acquired all of the outstanding common stock of Steinbeck Corporation for $11,000,000 in cash. The book values and fair values of Steinbeck's assets and liabilities were the following: Accounts receivable... Book Value: 1,300,000

Fair Value: 1,100,000

Land... BV: 1,200,000; FV: 1,500,000

Equipment... BV: 6,800,000; FV: 7,900,000

Patent... BV: 200,000; FV: 1,200,000

Accounts payable... BV: 1,700,000; FV: 1,700,000

Required: 1. Calculate the amount paid for goodwill.

2. Record the acquisition of Steinbeck Corporation.

Janzen Corporation acquired all of the outstanding common stock of Steinbeck Corporation for $11,000,000 in cash. The book values and falr values of Steinbeck's assets and llablities were the following: Required: 1. Calculate the amount paid for goodwill. 2. Record the acquisition of Steinbeck Corporation