Crunchies, Inc., dominates the snack-food industry with its Salty Chip brand. Assume that Crunchies, Inc., purchased Healthy

Question:

Crunchies, Inc., dominates the snack-food industry with its Salty Chip brand. Assume that Crunchies, Inc., purchased Healthy Snacks. Inc., for $5.8 million cash. The market value of Healthy Snacks' assets is $7 million, and Healthy Snacks has liabilities with a market value of $6.0 million?
Requirements
1. Compute the cost of the purchased by Crunchies?
2. Explain how Crunchies will account for in future years?
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...