On January 4, 2011, Penn Company acquired all 8,000 outstanding

On January 4, 2011, Penn Company acquired all 8,000 outstanding shares of Syracuse Company for $12 cash per share. Immediately after the acquisition, the balance sheets reflected the following:


On January 4, 2011, Penn Company acquired all 8,000 outstanding


Required:
1. Give the journal entry that Penn Company made to record the acquisition.
2. Analyze the acquisition to determine the amount of goodwill purchased.
3. Should Syracuse Company's assets be included on the consolidated balance sheet at book value or market value? Explain.
4. Prepare a consolidated balance sheet immediately after acquisition.

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...

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