Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On December 31, 2019, the Mega Corporation paid $104,000 for the purchase of Cafe Company. On December 31, 2019, the Caf Company had the following
On December 31, 2019, the Mega Corporation paid $104,000 for the purchase of Cafe Company. On December 31, 2019, the Caf Company had the following book values for its assets and liabilities:
Account | Book Value |
Cash | $16,000 |
Inventory | 31,400 |
Equipment (net) | 85,700 |
Notes payable | 46,000 |
Common stock | 19,500 |
Retained earnings | 67,600 |
An appraisal of the Caf Company determined that the inventory was undervalued by $4,900 and the equipment was overvalued by $6,500. Calculate the amount of goodwill that the Mega Corporation should record on December 31, 2019.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started