Question

ouTube Maps News Celebrating the Ed... - DUE 12/17 @ 11:59pm Saved Juliana Corporation purchased all of the outstanding stock of Caldwell Inc., paying $2,900,000 cash. Juliana assumed all of the liabilities of Caldwell. Book values and fair values of acquired assets and liabilities were: Book Value Fair Value Current assets (net) $420,000 $640,000 Property, plant, & equip. (net) 1,680,000 2,130,000 Liabilities 460,000 670,000 Juliana would record goodwill of: Multiple Choice O S 800,000 < Prex 3 of 20 Next > ere to search F2 @ F3 54 55 56 F7 F8 F 9 F10 F1

Answer 1

			Fair value
		Current assets	$640,000
		Property plant and equipment	$2,130,000
		Liabilities	$670,000
		Identifiable net assets	$2,100,000
		Cash paid	$2,900,000
		hence Goodwill =	$800,000
		Note: We ignore book values for the purpose of calculating goodwill.