Rutherford, Corp. aggressively acquired other companies. Assume that Rutherford, Corp. purchased Lancer, Inc. for $ 11 million
Question:
Rutherford, Corp. aggressively acquired other companies. Assume that Rutherford, Corp. purchased Lancer, Inc. for $ 11 million cash. The market value of Lancer’s assets is $ 15 million, and it has liabilities of $ 10 million.
Requirements
1. Compute the cost of goodwill purchased by Rutherford, Corp.
2. Record the purchase of Lancer, Inc. by Rutherford, Corp.
GoodwillGoodwill 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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Related Book For
Financial Accounting
ISBN: 978-0132889711
1st Canadian Edition
Authors: Jeffrey Waybright, Liang Hsuan Chen, Rhonda Pyper
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