Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume that you are...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume that you are charged with assigning fair values related to a $3,800,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $1,850,000. You also conclude that the purchase included a Customer List with a fair value at $340,000. a. How much Goodwill will you record in this acquisition? $ b. Continuing from part (a), now also assume that the purchase and sale agreement requires the payment of an additional $925,000 if the subsidiary achieves a certain level of earnings. You estimate the fair value of that contingent earnings clause in the agreement to be $220,000. How does this additional information affect your computation of Goodwill? The amount of Goodwill recorded is $ c. This part of the exercise is independent of parts (a) and (b). Assume that the purchase price is $3,800,000 and that fair value of the net identifiable tangible assets is $1,850,000. You also conclude that the purchase included a Customer List that you value at $640,000 and a Patent valued at $1,900,000. How much Goodwill will you record in this acquisition? The amount of Goodwill recorded is: $ Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume that you are charged with assigning fair values related to a $3,800,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $1,850,000. You also conclude that the purchase included a Customer List with a fair value at $340,000. a. How much Goodwill will you record in this acquisition? $ b. Continuing from part (a), now also assume that the purchase and sale agreement requires the payment of an additional $925,000 if the subsidiary achieves a certain level of earnings. You estimate the fair value of that contingent earnings clause in the agreement to be $220,000. How does this additional information affect your computation of Goodwill? The amount of Goodwill recorded is $ c. This part of the exercise is independent of parts (a) and (b). Assume that the purchase price is $3,800,000 and that fair value of the net identifiable tangible assets is $1,850,000. You also conclude that the purchase included a Customer List that you value at $640,000 and a Patent valued at $1,900,000. How much Goodwill will you record in this acquisition? The amount of Goodwill recorded is: $
Expert Answer:
Answer rating: 100% (QA)
a The formula for calculating Goodwill is Purchase Price Fair Value of Net Id... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Assume that you are charged with assigning fair values related to a $1,700,000 acquisition. You assemble the following information relating to the acquiree's assets and liabilities: Account Book...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Nike, Inc.s principal business activity involves the design, development, and worldwide marketing of athletic footwear, apparel, equipment, accessories, and services for serious and recreational...
-
How do stakeholders impact the uncertainty in a project?
-
Refer to the data for Foam Products, Inc., in Exercise 812 and the following additional details concerning the activity rates in the activity-based costing system: Management has provided their ease...
-
Prepare a balance sheet and a common sized balance sheet for Siam Cement Group (SCG), based in Thailand, from the following information (in Thai baht). Cash Accounts Receivable. Accounts Payable...
-
A certain data set contains 27 points. The least-squares regression line is computed, with the following results: Construct a 95% confidence interval for 1. b = 5.78, s = 1.35, and (x - x) = 3.4. Se
-
The 12 partners of a regional public accounting firm met in special session to discuss audit engagement efficiency. Jones spoke up, saying, We all certainly appreciate the firm wide policies set up...
-
Pastina Company sells various types of pasta to grocery chains as private label brands. The company\'s reporting year - end is December 3 1 . The unadjusted trial balance as of December 3 1 , 2 0 2 1...
-
Singularity in density of states (a) From the dispersion relation derived for a monatomic linear lattice of N atoms with nearest-neighbor interactions, show the density of modes is D(w) = 2N/ 1 /(w 2...
-
ACCOUNTING INFORMATION SYSTEMS DATA MODEL (REA) EXERCISE | Beach Dental Case (Conversion Process) Beach Dental Instruments, Inc. (BDI) manufactures dental instruments, such as inspection mirrors,...
-
You are an insurance investigator called out to investigate a claim based on a patient slipping and falling inside of a hospital. What are the initial steps as part of your investigation? What could...
-
Why does Law of Demand and Supply contribute to profit-maximizing management decision-making?
-
When referring to social welfare and organizational context in generalist practice, what are we referring to in social work?
-
What is the age rule for the Child Tax Credit for Tax Year 2022?
-
The new business models appearing in today's environment call for organizations to have a solid understanding of: A . Cost and utilization of healthcare resources B . Revenue optimization and cost C...
-
How do i implement a common size income statement analysis for this Income Statement. Net Revenue Cost of sales Gross profit Selling, general and administrative expenses Gain associated with the...
-
Explain how two samples can have the same mean but different standard deviations. Draw a bar graph that shows the two samples, their means an standard deviations as error bars. T S
-
Many European countries have stricter privacy laws than the United States. What is the impact of this discrepancy on multinational corporations with offices on both continents? In terms of business...
-
Assume that you are the CEO of a company that provides computers and access to email and the web to almost all of its employees. You are about to circulate a new IT use policy in the company. List...
-
What are the benefits of using data flow diagrams? Who benefits from DFDs?
-
Assume the same facts as in question 15 . What is the amount of dividends per share on common shares? a. \(\$ 9.50\) b. \(\$ 8.00\) c. \(\$ 17.50\) d. \(\$ 1.50\) e. None of the above
-
A corporation has \(20,000 \$ 8.00\) preferred shares outstanding with a stated value of \(\$ 2,000,000\). Also, there are 20,000 common shares outstanding. If a \(\$ 350,000\) dividend is paid, how...
-
Franco Company's net income and preferred dividends are \(\$ 44,000\) and \(\$ 4,000\), respectively, and average total common shareholders' equity is \(\$ 384,000\). How much is Franco's return on...
Study smarter with the SolutionInn App