Question

Middle Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Middle purchased goodwill as part of the acquisition of Shipley Wireless Enterprises, which had the following figures:
Book value of assets ...... $ 750,000
Market value of assets....... 900,000
Market value of liabilities ..... 550,000
Requirements
1. Journalize the entry to record Middle’s purchase of Shipley Wireless for $400,000 cash plus a $600,000 note payable.
2. What special asset does Middle’s acquisition of Shipley Wireless identify? Flow should Middle Telecom account for this asset after acquiring Shipley Wireless? Explain in detail.


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  • CreatedJune 15, 2015
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