Question 1 (6 points) On January 1, 2020, Brigham Corporation purchased Young Company by paying $250,000 cash and issuing a $100,000 note payable to Young Company. At January 1, 2020, the balance sheet of Young Company was as follows.

Cash $50,000 Accounts payable $200,000

Accounts receivable 90,000 Stockholders equity 235,000

Inventory 100,000 $435,000

Land 40,000

Buildings (net) 75,000

Equipment (net) 70,000

Trademarks 10,000

$435,000

The recorded amounts all approximate current fair values except for land (fair value of $60,000), inventory (fair value of $125,000), and trademarks (fair value of $15,000).

1. Calculate the amount of goodwill.

Acquisition price =

Fair value of net assets acquired =

Goodwill =

2. Prepare Brigham Corporations journal entry to record the purchase on January 1, 2020.

	Debit	Credit

3. Prepare the December 31, 2020 journal entry for Brigham Corporation to record amortization of trademarks. The trademarks have an estimated useful life of 4 years with a residual value of $3,000 (using the straight-line method).

	Debit	Credit