Exercise 10-6 Goodwill [LO10-1]
On March 31, 2018, Wolfson Corporation acquired all of the
outstanding common stock of Barney Corporation for $18,000,000 in
cash. The book values and fair values of Barney’s assets and
liabilities were as follows:
Book Value | Fair Value | |||||
Current assets | $ | 7,000,000 | $ | 8,500,000 | ||
Property, plant, and equipment | 12,000,000 | 15,000,000 | ||||
Other assets | 1,100,000 | 1,600,000 | ||||
Current liabilities | 5,000,000 | 5,000,000 | ||||
Long-term liabilities | 7,000,000 | 6,500,000 | ||||
Required:
Calculate the amount paid for goodwill.
The answer is NOT $3850000- I got it wrong :(
Fair Value of Assets & Liabilities shall be taken for the purpose of Goodwill.
Calculation of Goodwill | |||
(A) | Current assets | 85,00,000 | |
(B) | Property, plant, and equipment | 1,50,00,000 | |
(C) | Other assets | 16,00,000 | |
(D) | Current liabilities | 50,00,000 | |
(E) | Long-term liabilities | 65,00,000 | |
Net Assets( A+B+C-D-E) | 1,36,00,000 | ||
Purchase Consideration | 1,80,00,000 | ||
Goodwill | $ 44,00,000 | ||
Exercise 10-6 Goodwill [LO10-1] On March 31, 2018, Wolfson Corporation acquired all of the outstanding common...
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