Homework: Week 6 Chapter 09 problems Save score: 0 of 1 pt 160f 6 (1 complete) ?

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Homework: Week 6 Chapter 09 problems Save score: 0 of 1 pt 160f 6 (1 complete) ? HW Score: 429%, 026 of 6 pts P10-40B (similar to) Question Help Midtown Telecom provides communication services in lowa, Nebraska, the Dakotas, and Montana Midtown purchased goodwillals part of the acquisition of Shelidon Wireless Enterprises, which had the following figures EEB (Click the icon to view the data.) Requirements 1. Jounalize the entry to record Midtown's purchase of Sheldon Wireless for $280,000 cash plus a $420,000 note payable 2. What special asset does Midtown's acquisition of Sheldon Wireless identity? How should Midtown Telecom account for this asset after acquiring Sheldon Wireless? Explain in detail Requirement 1. Journalize the entry to record Midtown's purchase of Sheldon Wireless for $280,000 cash plus a $420,000 note payable. (Record debilts first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Choose from any list or enter any number in the input fields and then dlick Check Answer Check Answer Clear All

Explanation / Answer

.Net value of asset acquired = market value of asset -market value of liabilities

=1200000-540000

= 660000

Value paid = 280000+420000= 700000

goodwill = valuepaid - asset acquired

= 700000-660000

= 40000

a).

2)special asset identify at time of acquisition is "Goodwill" amounting to $ 40,000 . Goodwill should be recorded under non current asset (as intangible asset )and should be amortised over 10 years.

Date Account title Debit credit Asset 1200000 Goodwill 40000 Liabilities 540000 cash 280000 Note payable 420000

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