Problem 3 ( 8 points) The following balanee sheets were reported on January 1, 2024, for Wood Company and Rose Company: Required: Appraisals reveal that the inventory has a fair value $180,000, and the equipment has a current value of $615,000. The book value and fair value of liabilities are the same. Assuming that Wood Company wishes to acquire Rose for cash in an asset acquisition, determine the following cutoff amounts: A. The purchase price above which Wood would record goodwill. B. The purchase price at which Wood would record a $50,000 gain. C. The purchase price below which Wood would obtain a "bargain." D. The purchase price at which Wood would record $75,000 of goodwill. Answers: a. FV. of Rose Co 825,000 b. 775,000 c. Anything below 825,000 d. 825,000+75,000=900,000 Problem 3 ( 8 points) The following balanee sheets were reported on January 1, 2024, for Wood Company and Rose Company: Required: Appraisals reveal that the inventory has a fair value $180,000, and the equipment has a current value of $615,000. The book value and fair value of liabilities are the same. Assuming that Wood Company wishes to acquire Rose for cash in an asset acquisition, determine the following cutoff amounts: A. The purchase price above which Wood would record goodwill. B. The purchase price at which Wood would record a $50,000 gain. C. The purchase price below which Wood would obtain a "bargain." D. The purchase price at which Wood would record $75,000 of goodwill. Answers: a. FV. of Rose Co 825,000 b. 775,000 c. Anything below 825,000 d. 825,000+75,000=900,000