Question
Northern purchased the entire business of Southern including all its assets and liabilities for $2,640,000 on December 31, 2021. Below is information related to the
Northern purchased the entire business of Southern including all its assets and liabilities for $2,640,000 on December 31, 2021. Below is information related to the two companies at that date:
| Northern | Southern | |||||||
| Fair value of assets | $ | 4,620,000 | $ | 3,520,000 | ||||
| Fair value of liabilities | 2,310,000 | 1,320,000 | ||||||
| Reported assets | 3,520,000 | 2,860,000 | ||||||
| Reported liabilities | 2,200,000 | 1,100,000 | ||||||
| Net Income for the year | 264,000 | 220,000 | ||||||
How much goodwill did Northern pay for acquiring Southern?
a. $440,000
b. $1,320,000
c. $880,000
d. $660,000
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
