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1-Arlington, Inc. purchases all of the common stock of Frisco Company for $450,000 cash. At the acquisition date, Friscos st
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Answer #1

a)

Amount paid for acquisition 450000
less:Book value of equity acquired
common stock 300000
Retained earning 20000
Undervaluation of lalnd 30000
undervaluation of equipment 5000
Book value of equity (355000)
Goodwill at time of acquisition 95000

b)

Goodwill at time of acquisition 95000

less:Amortization of goodwill [95000/10]

-9500
Balance in goodwill after one year 85500
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