ABC Co. paid 190,000 BD to purchase the net assets of (Y) Company. The balance sheet...

   

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ABC Co. paid 190,000 BD to purchase the net assets of (Y) Company. The balance sheet of (Y) company at the acquisition day as follow: Assets Cash Receivables Inventories Equipment Total Liabilities and Equities Accounts payable Common stock Retained earnings Total Cost 10,000 15,000 80,000 80,000 185,000 15,000 110,000 60,000 185,000 Instruction: 1- Calculate the goodwill if the fair market value of the assets exceeds its net book value of $20,000: ABC Co. paid 190,000 BD to purchase the net assets of (Y) Company. The balance sheet of (Y) company at the acquisition day as follow: Assets Cash Receivables Inventories Equipment Total Liabilities and Equities Accounts payable Common stock Retained earnings Total Cost 10,000 15,000 80,000 80,000 185,000 15,000 110,000 60,000 185,000 Instruction: 1- Calculate the goodwill if the fair market value of the assets exceeds its net book value of $20,000:

Answer rating: 100% (QA)

Goodwill is calculated as the excess of the purchase price over the fair mar... View the full answer