Question: On January 4 2014 David Company acquired all of the

On January 4, 2014, David Company acquired all of the net assets (assets and liabilities) of William Company for $145,000 cash. The two companies merged, with David Company surviving. On the date of acquisition, William’s balance sheet included the following.

The property and equipment had a fair value of $85,000. William also owned an internally developed patent with a fair value of $3,000. The book values of the cash and liabilities were equal to their fair values.

1. How much goodwill was involved in this merger? Show computations.
2. Give the journal entry that David would make to record the merger on January 4,2014.

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  • CreatedJuly 01, 2014
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