PattonPatton

has acquired several other companies. Assume that

PattonPatton

purchased

KelleherKelleher

for

$ 7 comma 000 comma 000$7,000,000

cash. The book value of

Kelleher'sKelleher's

assets is

$ 17 comma 000 comma 000$17,000,000

(market value,

$ 19 comma 000 comma 000$19,000,000),

and it has liabilities of

$ 15 comma 000 comma 000$15,000,000

(market value,

$ 15 comma 000 comma 000$15,000,000).

Requirements

1.	Compute the cost of goodwill purchased by PattonPatton.
2.	Record the purchase of KelleherKelleher by PattonPatton.

Requirement 1. Compute the cost of goodwill purchased by

PattonPatton.

Purchase price to acquire Kelleher
Market value of Kelleher's assets
Less: Market value of Kelleher's liabilities
Less: Market value of Kelleher's net assets
Goodwill

Requirement 2. Record the purchase of

KelleherKelleher

by

PattonPatton,

Inc. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)

Date

Accounts and Explanation

Debit

Credit

PattonPatton

has acquired several other companies. Assume that

PattonPatton

purchased

KelleherKelleher

for

$ 7 comma 000 comma 000$7,000,000

cash. The book value of

Kelleher'sKelleher's

assets is

$ 17 comma 000 comma 000$17,000,000

(market value,

$ 19 comma 000 comma 000$19,000,000),

and it has liabilities of

$ 15 comma 000 comma 000$15,000,000

(market value,

$ 15 comma 000 comma 000$15,000,000).

Requirements

1.	Compute the cost of goodwill purchased by PattonPatton.
2.	Record the purchase of KelleherKelleher by PattonPatton.

Requirement 1. Compute the cost of goodwill purchased by

PattonPatton.

Purchase price to acquire Kelleher
Market value of Kelleher's assets
Less: Market value of Kelleher's liabilities
Less: Market value of Kelleher's net assets
Goodwill

Requirement 2. Record the purchase of

KelleherKelleher

by

PattonPatton,

Inc. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)

Date			Accounts and Explanation	Debit	Credit