Trust Holdings Ltd. purchased the net assets of Future Ltd. in January 2024 for $9,746,000. Trust had appraisals conducted that indicated that the fair values of the assets purchased and liabilities assumed were as follows:The patent acquired has 16 years remaining in its useful life. Trust’s management determined that it would contribute to the generation of revenues for 8 years, after which it would be obsolete. Trust has a December 31 year end.

Required 

a. Determine the amount of goodwill Trust Holdings Ltd. acquired in the purchase. 

b. Prepare the journal entry to record the amortization of the patent for 2024.

Transcribed Image Text:

Inventory Accounts receivable Machinery $1,456,000 856,000 3,654,000 Patents Accounts payable Loan payable $730,000 895,000 809,000