Vasquez Manufacturing Company decided to expand further by purchasing Wasserman Company. The statement of financial position of Wasserman Company as of December 31, 2019 was as follows:

Wasserman Company

Statement of Financial Position

December 31, 2019

Assets Equity and Liabilities

Plant assets (net) 1,025,000 Share capital-ordinary 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 350,000 and the fair value of the plant assets was 1,125,000. The fair value of the receivables is equal to the amount reported on the statement of financial position. The agreed purchase price was 2,095,000, and this amount was paid in cash to the previous owners of Wasserman Company.

Instructions

Determine the amount of goodwill (if any) implied in the purchase price of 2,095,000. Show calculations. Make Journal Entry of acquisition as well.

Assets Plant assets (net) Inventory Receivables Cash Total assets Wasserman Company Statement of Financial Position December 31, 2019 Equity and Liabilities 1,025,000 Share capital-ordinary 800,000 275,000 Retained earnings 885,000 550,000 Accounts payable 375,000 210,000 2.060.000 Total equity and liabilities 2.060.000