Question 13 Alpha Company was recently sold for $1,250,000. Alpha assets & liabilities consisted of the...
Question 13
Alpha Company was recently sold for $1,250,000. Alpha assets & liabilities consisted of the following:
|
Item |
Amount |
|
Cash |
$75,000 |
|
Inventory |
$275,000 |
|
Property, Plant & Equipment (net) |
$750,000 |
|
Accounts Payable |
$350,000 |
Using this information, how much should be recorded as Goodwill for this transaction?
Homework Answers
Total Assets = Cash + Inventory + Property, Plant and Equipment (net)
Total Assets = $75,000 + 275,000 + 750,000
Total Assets = $1,100,000
Total Liabilities = $350,000
Goodwill = Total Liabilities + Cash Recieved - Total Assets
Goodwill = $350,000 + 1,250,000 - 1,100,000
Goodwill = $500,000
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Question 13
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