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ID: 2402205 • Letter: V
Question
View History Bookmarks Window Help canvas.highline.edu Question 14 2 pts by P ulada based Eastern Star purchased the entire business of South Park for $1850, 000. ars ag the following was revealed in the accounting records 0001p book value FMV 600K 1.3M over s cash AR inventory 500K Other assets 250K AP Other liabilities 200K What is goodwill 600K s the old 1.3M 770K 325K 1.1M s Bmo moved a cou has a ter brick-ow 1.1M 200K a few of e that statist patient-focus O 115000 O 155000 O none of the above e a few of nibe DATA/new d Bailey store pro under con-.. o make use of ... 12Explanation / Answer
Correct Answer $ 155000
Calculation
Fair value of South park
Cash
$ 600,000.00
Accounts Receivables
$ 1,300,000.00
Inventory
$ 770,000.00
Other Assets
$ 325,000.00
Total Assets Acquired
$ 2,995,000.00
Less: Liabilities taken over
Accounts Payable
$ 1,100,000.00
Other Liabilities
$ 200,000.00
Total Liabilities taken over
$ 1,300,000.00
(A) Fair value of South park
$ 1,695,000.00
(B) Purchase Consideration paid
$ 1,850,000.00
(B-A) Goodwill
$ 155,000.00
Goodwill is the amount paid Over and above net assets undertaken.
Fair Marvet value of assets will be taken for calculations.
Fair value of South park
Cash
$ 600,000.00
Accounts Receivables
$ 1,300,000.00
Inventory
$ 770,000.00
Other Assets
$ 325,000.00
Total Assets Acquired
$ 2,995,000.00
Less: Liabilities taken over
Accounts Payable
$ 1,100,000.00
Other Liabilities
$ 200,000.00
Total Liabilities taken over
$ 1,300,000.00
(A) Fair value of South park
$ 1,695,000.00
(B) Purchase Consideration paid
$ 1,850,000.00
(B-A) Goodwill
$ 155,000.00
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