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Kirson Holdings Ltd. purchased the net assets of Baker Ltd. in January 2020 for $5,304,000. Kirson had appraisals conducted that indicated that the fair values

Kirson Holdings Ltd. purchased the net assets of Baker Ltd. in January 2020 for $5,304,000. Kirson had appraisals conducted that indicated that the fair values of the assets purchased and liabilities assumed were as follows:

Inventory $1,154,000 Patents $517,000
Accounts receivable 593,000 Accounts payable 612,000
Equipment 2,577,000 Bank loan payable 960,000

The patent acquired has 18 years remaining in its useful life. Kirsons management determined that it would contribute to the generation of revenues for five years, after which it would be obsolete.

A) Determine the amount of goodwill Kirson acquired in the purchase.

B) Prepare the journal entry to record the amortization of the patent for 2020. image text in transcribed

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