Question

On March 31, 2021, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation...

On March 31, 2021, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $18,800,000 in cash. The book values and fair values of Barney’s assets and liabilities were as follows: Book Value Fair Value Current assets $ 7,800,000 $ 9,300,000 Property, plant, and equipment 12,800,000 15,800,000 Other assets 1,180,000 1,680,000 Current liabilities 5,800,000 5,800,000 Long-term liabilities 7,800,000 7,300,000

Required:
Calculate the amount paid for goodwill.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer: Amount paid for Goodwill

= Price paid to Wolfson Corporation – Fair market value of Net Identifiable assets

                                     =$18800000-$13,680,000

                                    =$5,120,000

Where:-

Net Identifiable Assets = Fair market value of Assets – Fair Market Value of Liabilities

                                         = $26,780,000-$13,100,000

                                         =$13,680,000

Fair market value of Assets= Current Assets + Noncurrent Assets + Other assets

                                               = $9300000+$15800000+$1680000

                                               =$26,780,000

Fair Market Value of Liabilities = Current Liabilities + Noncurrent Liabilities

                                                        = $5800000+$7300000

                                                       = $13,100,000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $38,000,000 in...
Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $38,000,000 in cash. The book values and fair values of Iceberg’s assets and liabilities were as follows:    Book Value Fair Value   Current assets $ 11,000,000 $ 14,000,000   Property, plant, and equipment 30,000,000 36,000,000   Other assets 3,000,000 4,000,000   Current liabilities 7,400,000 7,400,000   Long-term liabilities 12,600,000 11,600,000    Required: Calculate the amount paid for goodwill.
Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $13,040,000 in cash....
Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $13,040,000 in cash. The book value of Smith’s net assets (assets minus liabilities) was $9,500,000. The fair values of all of Smith’s assets and liabilities were equal to their book values with the following exceptions: Book Value Fair Value Receivables $ 3,000,000 $ 2,630,000 Property, plant, and equipment 9,700,000 11,270,000 Intangible assets 370,000 1,540,000 Required: Calculate the amount paid for goodwill.   
On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc.,...
On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc., for $450 million. The fair value of Harman's identifiable tangible and intangible assets totaled $533 million, and the fair value of liabilities assumed by Pesky was $170 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2021. Management has provided the following information: Fair value of Harman, Inc. $ 430 million Fair value of Harman's net...
Beaver Corporation purchased all of the outstanding common stock of Cole Corporation for$2,000,000 in cash.The book...
Beaver Corporation purchased all of the outstanding common stock of Cole Corporation for$2,000,000 in cash.The book value of Cole's net assets was$1,200,000.The fair values of all of Cole's assets and liabilities were equal to their book values with the following exceptions:Receivables with book value of$400,000 but fair value of$300,000; Property,plant and equipment with book value of$1,500,000 but fair value of$1,800,000;Intangible assets with book value of$100,000 but fair value of$250,000.The amount paid for goodwill would be:
During the current year, Brewer Company acquired all of the outstanding common stock of Miller Inc....
During the current year, Brewer Company acquired all of the outstanding common stock of Miller Inc. paying $12,000,000 cash. The book values and fair values of Miller's assets and liabilities acquired are listed below:   Book Value   Fair Value Accounts receivable $1,800,000 $ 1,625,000 Inventories 2,700,000 4,000,000 Property, plant, and equipment 9,000,000 11,625,000 Accounts payable 3,000,000 3,000,000 Bonds payable 4,500,000 4,125,000                         Required:             Prepare the journal entry to record the acquisition by Brewer Company.
On May 28, 2018, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc.,...
On May 28, 2018, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc., for $550 million. The fair value of Harman's identifiable tangible and intangible assets totaled $603 million, and the fair value of liabilities assumed by Pesky was $177 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2018. Management has provided the following information: Fair value of Harman, Inc. $ 530 million Fair value of Harman's net...
On May 28, 2018, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc.,...
On May 28, 2018, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc., for $580 million. The fair value of Harman's identifiable tangible and intangible assets totaled $624 million, and the fair value of liabilities assumed by Pesky was $166 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2018. Management has provided the following information: Fair value of Harman, Inc. $ 560 million Fair value of Harman's net...
Parent Corporation acquired 80% of the common stock of Subs, Inc. on January 1, 2017 for...
Parent Corporation acquired 80% of the common stock of Subs, Inc. on January 1, 2017 for $310,000. The total book value of Subs, Inc. stock on the date of combinations was $300,000. On the date of combination, all assets and liabilities of Subs, Inc. had fair values equal exceeded their book values, except that the fair value of inventory, land, and building and equipment each exceeded their book value by $5,000, $10,000, and $60,000 respectively. Any remaining differential is to...
Princeton Company acquired 75 percent of the common stock of Sheffield Corporation on December 31, 2011....
Princeton Company acquired 75 percent of the common stock of Sheffield Corporation on December 31, 2011. On the date of acquisition, Princeton held land with a book value of $150,000 and a fair value of $300,000; Sheffield held land with a book value of $100,000 and fair value of $500,000. What amount would land be reported in the consolidated balance sheet prepared immediately after the combination? a.$650,000 b.$500,000 c.$550,000 d.$375,000 On January 1, 2011, Primer Corporation acquired 80 percent of...
19-Lake Incorporated purchased all of the outstanding stock of Huron Company paying $960,000 cash. Lake assumed...
19-Lake Incorporated purchased all of the outstanding stock of Huron Company paying $960,000 cash. Lake assumed all of the liabilities of Huron. Book values and fair values of acquired assets and liabilities were: Book Value Fair Value Current assets (net) $ 130,700 $ 124,400 Property, plant, equip. (net) 612,000 760,000 Liabilities 150,400 177,000 Lake would record goodwill of: Multiple Choice $367,700. $252,600. $75,600. $0. 20-An exclusive 20-year right to manufacture a product or use a process is a: Multiple Choice...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT