Mitre Company acquired Midwest Transportation Co. for $1,400,000. The fair market values of the assets acquired were

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 acquired.
b. Prepare the journal entry to record the amortization of the franchise fee at the end of year 1.
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...