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The notes to a recent annual report from Megan's Shoe Corporation indicated that the company acquired another company, Laster's Shoes, Inc. Assume that Megan's acquired
The notes to a recent annual report from Megan's Shoe Corporation indicated that the company acquired another company, Laster's Shoes, Inc. Assume that Megan's acquired Laster's Shoes on January 5 of the current year. Megan's acquired the name of the company and all of its assets at $750,000 cash. Megan's did not assume the liabilities. On January 5 of the current year, when the transaction was closed, Laster's Shoes' balance sheet reflected teh following book values. An independent appraiser estimated the following market values for the assets. Jan 5, current year Accounts Receivable (net) Inventory Fixed assets (net) Other Assets Total Assets Liabilities Stockholders' equity Total Liabilities and Stockholders' equity Laster's Shoes, INC Book Value the amount of goodwill from the purchase is: A $230,000 (B) $543,000 C) $132,000 (D) $155.000 $ 50,000 385,000 Market Value $50,000 350,000 156,000 208,000 4,000 4,000 $595,000 $75,000 520,000 $595,000
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