Question
Arizona Corp. acquired the business Data Systems for $290,000 cash and assumed all liabilities at the...
Arizona Corp. acquired the business Data Systems for $290,000
cash and assumed all liabilities at the date of purchase. Data’s
books showed tangible assets of $280,000, liabilities of $13,000,
and stockholders’ equity of $267,000. An appraiser assessed the
fair market value of the tangible assets at $280,000 at the date of
acquisition.
Required
a. Compute the amount of goodwill acquired.
b. Record the acquisition in a financial
statements model. Arizona Corp.’s financial condition just prior to
the acquisition is shown in the following statements model.
a.
Compute the amount of goodwill acquired. (Amounts to be deducted should be indicated with minus sign.)
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b.
Record the acquisition in a financial statements model. Arizona Corp.’s financial condition just prior to the acquisition is shown in the following statements model. (In the Cash Flow column, use OA to designate operating activity, IA for investment activity, and FA for financing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.)
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