Question
Pringles Company pays $5,000,000 for Suspect Company and records the acquisition as a merger. Pringles determines that identifiable intangibles valued at $1,750,000 not previously reported
Pringles Company pays $5,000,000 for Suspect Company and records the acquisition as a merger. Pringles determines that identifiable intangibles valued at $1,750,000 not previously reported on Suspect's books should also be recognized as assets.
Suspect's fair value of booked assets and liabilities are:
| Current Assets | $300,000 |
| Land | $700,000 |
| Buildings & Equipment | $1,200,000 |
| Loans Payable | $(400,000) |
a. Goodwill is: ?
b. If Pringles paid $3,000,000 instead of $5,000,000 for Suspect,
Pringles would report a gain of: ?
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Risky Business Principles Of Auditing Property And Casualty Insurance
Authors: Seth A. Davis, CIA, CPA, CPCU, CFA, CISA
1st Edition
0894139711, 978-0894139710
