Homework Answers
In the books of Planket
JOURNAL ENTRY
(Amount in $)
|
Date |
Particulars |
Debit |
Credit |
|
Dec 31, 20X1 |
Cash & Receivables A/c |
40,000 |
|
|
Inventory A/c |
1,50,000 |
||
|
Land A/c |
30,000 |
||
|
Plant & Equipment A/c |
3,50,000 |
||
|
Patent A/c |
1,30,000 |
||
|
Goodwill A/c (balancing figure) |
50,000 |
||
|
To Accounts Payable A/c |
80,000 |
||
|
To Cash A/c |
6,70,000 |
||
|
(Being purchase of Spur Corporation's assets and liabilities recorded) |
Working Notes:
Formula for calculation of Goodwill = Consideration paid- (Fair value of assets acquired- book value of liabilities)
Therefore, Goodwill to be recorded in books of Planket is calculated as follows:
= $6,70,000- ($7,00,000- $80,000)
= $50,000
Add Answer to:
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