Horn Co. acquired the business Medical Supply Co. for $275,000 cash and assumed all liabilities at the

Question:

Horn Co. acquired the business Medical Supply Co. for $275,000 cash and assumed all liabilities at the date of acquisition. Medical€™s books showed tangible assets of $250,000, liabilities of $10,000, and equity of $240,000. An appraiser assessed the fair market value of the tangible a s sets at $265,000 at the date of acquisition. Horn€™s financial condition just prior to the acquisition is shown in the following statements model:

Required
a. Compute the amount of goodwill acquired.
b. Record the acquisition in a financial statements model like the preceding one.
c. Record the acquisition in general journal format.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...