Othello Corporation purchases Shakespeare Inc. for $3.5 M. Shakespeare has the following assets all recorded at cost:
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Question:
Othello Corporation purchases Shakespeare Inc. for $3.5 M. Shakespeare has the following assets all recorded at cost:
Accounts Receivable $ 125,000
Inventory $ 350,000
Land $ 500,000
Building (net) $ 350,000
Equipment (net) $ 50,000
Total Assets $1,375,000
The fair value of the assets is $2,350,000 and Othello also assumes $600,000 of debt from Shakespeare.
Instructions
As Othello purchases Shakespeare, what is the value of the goodwill?
Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date: