Question
Purple Corp. purchased all of the listed assets and liabilities of Sudden Corp. for $1,600,000. The following assets and liabilities were purchased: Book Value Fair
Purple Corp. purchased all of the listed assets and liabilities of Sudden Corp. for $1,600,000. The following assets and liabilities were purchased:
|
| Book Value | Fair Market Value | ||||
| Accounts receivables | $ | 140,000 |
| $ | 140,000 |
|
| Inventory |
| 168,000 |
|
| 256,000 |
|
| Property, plant, and equipment (net) |
| 820,000 |
|
| 1,040,000 |
|
| Patent |
| 0 |
|
| 276,000 |
|
| Liabilities |
| (170,000 | ) |
| (170,000 | ) |
Required: 1. What is the appropriate amount that would be recorded for goodwill?
2. Prepare the journal entry for the acquisition. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
9th Canadian Edition, Volume 2
470964731, 978-0470964736, 978-0470161012
