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Q5. Explain why a company would pay more than the fair market value of another company's net assets. [1 mark] Q6. On Jan 1, 2019
Q5. Explain why a company would pay more than the fair market value of another company's net assets. [1 mark] Q6. On Jan 1, 2019 Miley Co. sold 700 computers. The $1,500 cash price included a 2-year assurance warranty. Miley estimated that over the 2-year period, warranty costs would amount to 90 for each computer sold. Assume warranty costs of $18,000 were incurred during 2019. The remaining warranty costs were incurred during 2020 Provide journal entries to record these transactions, commencing with the sale in Jan 2019. [3 marks] D DO Q7. Alpha Co. purchases Beta Co. for $840,000 cash on Jan 1, 2019. The book value of Beta Co's net assets as reflected on its Dec 31, 2018 statement of financial position is $620,000. An analysis by Alpha on Dec 31, 2018 indicates that the fair value of Beta's tangible assets exceeded the book value by $60,000, and the fair value of identifiable intangible assets exceeded book value by $45,000 How much goodwill should be recognized by Alpha Co. when recording the purchase of Beta Company? [2 marks) Shore posibilitate la paredil Answer: Alpha hudo podwill of
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