Question: Midland Telecom provides communication services in Iowa Nebraska the Dakotas

Midland Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Midland 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 ........... 1,000,000
Market value of liabilities ........ 530,000

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.

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  • CreatedJanuary 16, 2015
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