Question: Please explain each step and how you got your answer! Goodwill arises when one firm acquires the net assets of another firm and pays more

Please explain each step and how you got your answer! Goodwill

Please explain each step and how you got your answer!

Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Co. had operating income of $69,100 and net assets with a fair value of $229,000. Takeover Co. pays $301,000 for Target Co.'s net assets and business activities. Required: a. How much goodwill will result from this transaction? Goodwill b. Calculate the ROI for Target Co. based on its present operating income and the fair value of its net assets. (Round your percentage answer to 2 decimal places.) ROI % c. Calculate the ROI that Takeover Co. will earn if the operating income of the acquired net assets continues to be $69,100. (Round your percentage answer to 2 decimal places.) ROI %

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

1 O points Skipped eBook Exercise 6-20 (Static) Goodwill-effect on ROI and operating income LO 6-9 Goodwill arises when one firm acquires the net assets of another firm and pays more for those net...

Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Got Em Co. had operating income of $56,000 and net...

See attached 1. Basket purchase allocation. Crow Co. purchased some of the machinery of Hare, Inc., a bankrupt competitor, at a liquidation sale for a total cost of $33,600. Crow's cost of moving and...

ad Homework M Questions Saved H Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Co. had...

Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Company had operating income of $55,900 and...

For each of the following expenditures, indicate the type of account (asset or expense) in which the expenditure should be recorded. a. $68,000 annual cost of routine repair and maintenance...

You write a call option with X = 50 and buy a call with X = 60. The options are on the same stock and have the same expiration date. One of the calls sells for $3; the other sells for $9. a. Draw the...

John's taxable income is $48,000. 1. What is his marginal tax rate? (see Table below) Marginal tax brackets for 2023 tax year Marginal rate 10% 12% 22% 24% 32% 35% 37% Single $11,000 or less $11,000...

What does the following Python program accomplish? for f in sys . argv [ 1 : ] : try: with open ( f , " r " ) as infile: lines = infile.readlines 0 print ( lines [ O ] . rstrip ( " | n | " ) ) print...

is court record show the inadmissibility for LPR for international travel ? ? ?

You show up late for an appointment with a colleague. Your co - worker says something negative about this to you, even though he or she frequently keeps you waiting.

Every time we stand in a long line in the grocery store because additional cash registers arent being staff ed and we dont point this out, we enable managers to believe that they can get away with...

What needs to happen to make your organizations culture one in which people are willing to apologize?