Fresh Cut Corporation purchased all the outstanding common stock of Premium Meat
ID: 2479770 • Letter: F
Question
Fresh Cut Corporation purchased all the outstanding common stock of Premium Meats for $10,500,000 in cash. The book values and fair values of Premium Meats' assets and liabilities were:
1. Calculate the Amount Fresh Cut Paid for Goodwill
2.Record Fresh Cut's of Premium meats
Book Value Fair Value Receivables $ 1,050,000 $ 850,000 Property, plant, and equipment 7,750,000 9,150,000 Intangible assets 150,000 950,000 Liabilities (1,200,000) (1,200,000) Net assets $ 7,750,000 $ 9,750,000Explanation / Answer
Book Value Fair Value Receivables $ 1,050,000 $ 850,000 Property, plant, and equipment 7,750,000 9,150,000 Intangible assets 150,000 950,000 Liabilities (1,200,000) (1,200,000) Net assets $ 7,750,000 $ 9,750,000 price paid for 10500000 fair value of net assets 9750000 amount of goodwill 750000 Record of Fresh Cut's of Premium meats Receivables debit 850000 Property, plant, and equipment debit 9150000 Intangible assets debit 950000 goodwill 750000 Liabilities credit 1200000 purchase consideration credit 10500000
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