On September 1, 20Y8, Vernon Corporation acquired Barlow Enterprises for a cash payment of $2,300,000. At the time of acquisition, Barlow's balance sheet showed assets of $1,800,000, liabilities of $600,000, and owner's equity of $1,200,000. A recent appraisal indicated that the fair value of Barlow's assets is estimated to be $2,100,000. How much goodwill was generated due to this acquisition? What is the net dollar value impact this transaction had on assets? What is the net dollar value impact this transaction had on liabilities? What is the net dollar value impact this transaction had on equity?

On September 1, 20Y8, Vernon Corporation acquired Barlow Enterprises for a cash payment of $2,300,000. At the time of acquisition, Barlow's balance sheet showed assets of $1,800,000, liabilities of $600,000, and owner's equity of $1,200,000. A recent appraisal indicated that the fair value of Barlow's assets is estimated to be $2,100,000. How much goodwill was generated due to this acquisition? What is the net dollar value impact this transaction had on assets? What is the net dollar value impact this transaction had on liabilities? What is the net dollar value impact this transaction had on equity?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 10PA: Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth...

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Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth $4,500,000. A. What is the amount of goodwill in this transaction? B. What is Buchanans journal entry to record the purchase of McLaren? C. What journal entry should Buchanan write when the company internally generates additional goodwill in the year following the purchase of McLaren?
Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny Side had net assets worth $390,000. A. What is the amount of goodwill in this transaction? B. What is Farm Fresh Agriculture Companys journal entry to record the purchase of Sunny Side Egg Distribution? C. What journal entry should Farm Fresh Agriculture Company write when the company tests for impairment and determines that goodwill is worth $1,000 in the year following the purchase of Sunny Side?
On August 1, 2017, Riverbed Corporation acquired Marin, Inc. for a cash payment of $2.30 million. At the time of purchase, Marin’s balance sheet showed assets of $4,422,000, liabilities of $2,622,000, and owners’ equity of $1,800,000. The fair value of Marin’s identifiable assets is estimated to be $4,330,000.Compute the amount of goodwill acquired by Riverbed.
On September 1, 2018, Vernon Corporation acquired Barlow Enterprises for a cash payment of $820.000. At the time of purchases. Barlow's balance sheet showed assets of $610.000. liabilities of $240.000, and owner's equity of $420.000. The fair value of Barlow's assets is estimated to be 5970.000.The liabilities are all estimated to be at fair value. a) Compute the amount of goodwill acquired by Vernon. 120000 b) On December 31, 2020, the fair value of Barlow as a reporting unit is estimated to be $720.000. The carrying value of Vernon's investment in Barlow at year-end is $750.000. The fair value of Barlow's identifiable net asset, excluding the goodwill, is determined to be 655.000 Prepare Vernon's journal entry, if necessary, to record impairment of goodwill. Please use the new standard (Hint: The FASB's new goodwill Impairment testing guidance- ASU 2017-04 is required for public SEC filers for periods beginning after December 15. 2019) Note: Please use integer only. Do not use a S.…
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First Company purchased Second Company for $19,000,000 cash. At the time of purchase, Second Company's assets had a market value of $28,000,000 and the liabilities had a market value of $13,000,000. At the time of the purchase, Second Company's assets had a book value of $15,000,000, and the liabilities had a book value of $9,000,000. What amount of goodwill is recorded?
September 1, 2020, Winans Corporation acquired Aumont Enterprises for a cash payment of $700,000. At the time of purchase, Aumont's balance sheet showed assets of $620,000, liabilities of $200,000, and owners' equity of $420,000. The fair value of Aumont's assets is estimated to be $800,000. Compute the amount of goodwill recorded by Winans in the acquisition.
Robinson Company purchased Franklin Company at a price of $3,820,000. The fair market value of the net assets purchased equals $2,750,000. 1. What is the amount of goodwill that Robinson records at the purchase date? 2. Does Robinson amortize goodwill at year-end? 3. Robinson believes that its employees provide superior customer service, and through their efforts, Robinson believes it has created $1,520,000 of goodwill. Should Robinson Company record this goodwill? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the amount of goodwill that Robinson records at the purchase date? Goodwill