Hunt Company is considering purchasing a competing company in order to expand its market share. Estimates of the excess of the value of the individual assets, less liabilities to be assumed, range from $50,000 to $60,000, depending on the manner in which that excess is calculated. Hunt believes it can purchase the competitor for a direct cash outlay of $700,000, which is only $25,000 more than the value of the individual assets less the liabilities that Hunt will assume. Assuming Hunt makes the purchase for $700,000; at what amount should goodwill be recorded? Briefly explain your answer.
Answer to relevant QuestionsList some of the more analytical functions performed by professional accountants.Up & Away Airlines has provided the following information regarding cash received for ticket sales in September and October: Cash received in September for October ﬂights............$500,000 Cash received in October for ...Miller Mining acquired rights to a tract of land with the intent of extracting from the land a valuable mineral. The cost of the rights was $2,500,000 and an estimated 10,000 tons of the mineral are expected to be extracted. ...Fox Company has debt totaling $2,000,000 and total stockholders’ equity of $4,000,000. WolfeCompany has debt totaling $3,000,000 and stockholders’ equity of $5,000,000.a. Calculate the debt ratio for each company.b. ...Gannon, Inc., had 100,000 shares of common stock outstanding. During the current year, the company distributed a 10 percent stock dividend and subsequently paid a $0.50 per share cash dividend. Calculate the number of shares ...
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