Question

Mitre Company acquired Midwest Transportation Co. for $1,400,000. The fair market values of the assets acquired were as follows. No liabilities were assumed.
Equipment ........ $510,000
Land ......... 150,000
Building ........ 520,000
Franchise (10-year life) ... 40,000
Required
a. Calculate the amount of goodwill acquired.
b. Prepare the journal entry to record the amortization of the franchise fee at the end of year 1.


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  • CreatedApril 20, 2015
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