Homework Answers
Goodwill = Purchase price - Fair value of net assets = $400000 = $350000 = $50000
| Date | Account | Debit | Credit |
| Goodwill | 50000 | ||
| Cash | 25000 | ||
| Accounts receivable | 35000 | ||
| Inventory | 122000 | ||
| PPE (net) | 205000 | ||
| Patents | 18000 | ||
| Liabilities | 55000 | ||
| Cash | 400000 | ||
| (To record the purchase of Company A) |
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