Jalen Running QB Inc. is considering purchasing the net assets of USFLX Corporation. Following is the statement
Question:
Jalen Running QB Inc. is considering purchasing the net assets of USFLX Corporation. Following is the statement of financial position of USFLX as at December 31, 2022.
USFLX CORPORATION | |
Statement of Financial Position | |
As at December 31, 2022 | |
Current assets | $ 231,400 |
Buildings and equipment | 753,000 |
Accumulated amortization | (113,000) |
Land | 173,000 |
Total assets | $ 1,044,400 |
Current liabilities | $ 187,000 |
Common shares | 577,000 |
Retained earnings | 280,400 |
Total liabilities and equity | $ 1,044,400 |
Following are the fair values of NFL's net assets as at December 31, 2022.
Current assets | $ 225,500 |
Buildings and equipment | 482,600 |
Land | 313,500 |
Current liabilities | (166,300) |
$ 855,300 |
Instructions
Calculate the value of goodwill that would be recorded by Jalen Running QB Inc. if it offered $ 2,060,300 for the net assets of USFLX Corporation.
Intermediate Accounting Volume 2
ISBN: 9781119740445
13th Canadian Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy