Midland Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Midland purchased goodwill as part
Question:
Wireless Company, which had the following figures:
Book value of assets . . . . . . . . . . . . . . . . . $ 750,000
Market value of assets . . . . . . . . . . . . . . . . 1,000,000
Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 530,000
Requirements
1. Journalize the entry to record Midland’s purchase of Shipley Wireless for $320,000 cash plus a $480,000 note payable.
2. What special asset does Midland’s acquisition of Shipley Wireless identify? How should Midland Telecom account for this asset after acquiring Shipley Wireless? Explain in detail.
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...
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Step by Step Answer:
Req 1 Cost of goodwill purchased Purchase price paid for Shipley 320000 48...View the full answer
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Related Book For 
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
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