Daleran Company acquired Burritt Industries by paying $19 million. At the acquisiton date the following data...

  

Transcribed Image Text:

Daleran Company acquired Burritt Industries by paying $19 million. At the acquisiton date the following data is available: E (Click the icon to view the data.) At the acquisiton date Burritt's current assets had a current market value of $15 million, long-term assets hada current market value of only $16 million, and liabilities had a market value of S29 million. Read the requirements. Requirement 1. Compute the cost of goodwill purchased by Daleran Company. (Enter amounts in millions.) Data Table Cost of goodwill purchased: Millions Burritt Industries Less: Assets Liabilities and Equity Current assets. .. S 15 Total liabilities......... 29 23 Stockholders' equity... Lang-term assets Cost of goodwill 38 38 Requirement 2. Journalize Daleran's purchase of Burritt Industries. (Record debits first, then credits. Exclude explanations from any journal ent Journal Entry Print Done Accounts Debit Credit Millions Requirement 3. Explain how Daleran will account for goodwill. Each year, Daleran will determine whether the goodwill that Daleran purchased has been impaired in value. If the goodwill's value has not been impaired, If the goodwill's value has been impaired, Daleran Company acquired Burritt Industries by paying $19 million. At the acquisiton date the following data is available: E (Click the icon to view the data.) At the acquisiton date Burritt's current assets had a current market value of $15 million, long-term assets hada current market value of only $16 million, and liabilities had a market value of S29 million. Read the requirements. Requirement 1. Compute the cost of goodwill purchased by Daleran Company. (Enter amounts in millions.) Data Table Cost of goodwill purchased: Millions Burritt Industries Less: Assets Liabilities and Equity Current assets. .. S 15 Total liabilities......... 29 23 Stockholders' equity... Lang-term assets Cost of goodwill 38 38 Requirement 2. Journalize Daleran's purchase of Burritt Industries. (Record debits first, then credits. Exclude explanations from any journal ent Journal Entry Print Done Accounts Debit Credit Millions Requirement 3. Explain how Daleran will account for goodwill. Each year, Daleran will determine whether the goodwill that Daleran purchased has been impaired in value. If the goodwill's value has not been impaired, If the goodwill's value has been impaired,