Question

2.4 keted to consumers beginning in September 2019. eGames estimates total revenue of $20,000,000 to be ca S3,500,000 was spent before July 2019-when technol during the software's three-year life (calculated from the September 1 product release date). During 2019, of $10,000,000 was recognized. tev Required: . Prepare the 2019 journal entries to record the development costs. 2. Compute the amount of amortization to be recognized in 2019 and prepare the appropriate journal entr 3. Next Level What is the justification for treating software development costs differently from R&D cosm E12-17 Goodwill Elm Company is considering purchasing EKC Company. EKC's balance sheet at December 31, 30 any. is as follows: LO 12.5 $ 60,000 200,000 300,000 280,000 $840,000 Current liabilities Bonds payable Common stock Retained earnings $ 50,000 70,000 120,000 600,000 $840,000 Cash Accounts receivable Inventory Property, plant, and equipment (net) At December 31, 2019, Elm discovered the following about EKC: No allowance for uncollectible accounts has been established. An allowance of $5,000 is conid appropriate. b. The LIFO inventory method has been used. The FIFO inventory method would be used if EKC purchased by Elm. The FIFO inventory valuation of the December 31, 2019, ending inventory wo $180,000. The fair value of the property, plant, and equipment (net) is $730,000. d. The company has an unrecorded patent that is worth $120,000. The book values of the current liabilities and bonds payable are the same as their market values. a. c. e. Required: 1. Compute the value of the goodwill if Elm pays $1,350,000 for EKC. 2. Next Level Why would the book value of a company's identifiable net assets differ from its market

12-17

Answer 1

$50,000 Еке Соре о. Computation of value of Conspany assets of Cincilities, Particulars 11 P.) Amount Cash Account Recelvable. B To,ooo Less Uncollectiable allowance 815000 lorooo Inventory by fifo B. 1,89000 Property Plant & Equipment 87, 3gpoo Palendt (unrewrelad) 1,00,000 Totul Asset : $ 140,45,000 Less! Bonds payable $2,00,000 Curceue bыtikas 60,00 Total liabilities! $(2,60,000) Net Asset value 88,85,000 Cess! flm company pays $ 13,50,000. Actual/ fair value of 8 8,85000 Eke company 8 4,65,000 Goodwill Goodwill z Amount laid by flm Company - Actual / Net Asset offre company, nenondation 12 BOOKS vcelue of company's aset are based on the "t13 torical lost" concept. However there are various factors ine - Inflation Technology upgradatie Deuland supply forces which Privelge in and Heure effect the Book value of company desset.