Raider Co. recently acquired all of Lost Arc, Inc.\'s net assets in a business a

Question

Raider Co. recently acquired all of Lost Arc, Inc.'s net assets in a business acquisition. The cash purchase price was $7.8 million. Lost Arc. Inc.'s assets and liabilities had the following appraised values immediately prior to the acquisition: land. $2.1 million; buildings, $3.8 million; inventory, $2.6 million: long-term notes payable, for which Raider Co. assumes payment responsibilities. $1.9 million. How much goodwill will result from this transaction?(Enter your answers in whole dollars.)

Explanation / Answer

Statement showing computations Particulars Amount Land              2,100,000.00 Building              3,800,000.00 Inventory              2,600,000.00 Total Assetss Exclusing Goodwill              8,500,000.00 Long term Notes payable              1,900,000.00 Net Assets = Total Assets - Liab              6,600,000.00 Purchase Price              7,800,000.00 Goodwill = Purchase price - Net Assets excl Goodwill              1,200,000.00

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