REQUIRED:

Determine the amount of goodwill (if any) implied in the purchase price of RM2,095,000. Show calculations. Prepare journal entry.

A. Vasquez Manufacturing Bhd decided to expand further by purchasing Wasserman Bhd. The statement of financial position of Wasserman Bhd as of 31 December 2019 was as follows: Wasserman Bhd. Statement of Financial Position 31 December 2019 Assets Equity and Liabilities Plant assets (net) RM1,025,000 Share capital-ordinary RM 800,000 Inventory 275,000 Retained earnings 885,000 Receivables 550,000 Accounts payable 375,000 Cash 210,000 Total assets 2.060.000 Total equity and liabilities 2.060.000 An appraisal, agreed to by the parties, indicated that the fair value of the inventory was RM350,000 and the fair value of the plant assets was RM1,125,000. The fair value of the receivables is equal to the amount reported on the statement of financial position. The agreed purchase price was RM2,095,000, and this amount was paid in cash to the previous owners of Wasserman Bhd