Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please show how Goodwill is calculated. Business Combination Example ABC Co. acquired 100% of the voting stock of XYZ Co. on 1/2kl fr S75.000. The
Please show how Goodwill is calculated. Business Combination Example ABC Co. acquired 100% of the voting stock of XYZ Co. on 1/2kl fr S75.000. The assets and liabilities of each company on this date are as follows: ABC XYZ XYZ Book Value Book Value Fair Value Assets: Cash Accounts Receivable Inventory Plant Assets (net) Patents In-Process R & D $ 1,000 2,300 4,200 58,000 22,000 $ 800 1,200 1,800 27,000 2,200 $ 800 1,100 2,700 31,000 46,000 17,000 Liabilities Accounts Payable Bonds Payable 3,200 45,000 1,500 30,000 1,500 29,000 What entry would ABC make to record this acquisition? How much goodwill is associated with this acquisition? How would the answers to these questions change if ABC acquired 90% of the voting stock of XYZ for $67,500
Please show how Goodwill is calculated.
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