Homework Answers
1. Goodwill is calculated by subtracting Fair value of Net assets from Total Purchase price
Goodwill = $10800000 - $9900000 = $900000
= $0.9 Million
2. 1. Business Purchase A/c $10800000
Premium Meats A/c $10800000
2.Accounts Receivable A/c $1000000
Equipment A/c $9300000
Patents A/c $1100000
Goodwill A/c $900000
Notes Payable A/c $1500000
Business Purchase A/c $10800000
3. Premium Meats A/c $10800000
Cash A/c $10800000
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Problem 7-3B Calculate and record goodwill (LO7-2)
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