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1. How much has Down Home Foods included for intangibles in its offer of $6,600,000? 2. Assuming Taste-T accepts this offer, which company will report Goodwill on its balance sheet and at what amount?

1. How much has Down Home Foods included for intangibles in its offer of $6,600,000? 2. Assuming Taste-T accepts this offer, which company will report Goodwill on its balance sheet and at what amount?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vikram Bhai 

M9-12 (Algo) Computing Goodwill and Patents [LO 9-6] Taste-T Company has been in business for 30 years and has developed a large group of loyal restaurant customers. Down Home Foods made an offer to buy Taste-T Company for $6,600,000. The market value of Taste-T's tangible assets, net of liabilities, on the date of the offer is $5,900,000. Taste-T also holds a patent for a fluting machine that the company invented (the patent with a market value of $350,000 was never recorded by Taste-T because it was developed internally). Required: 1. How much has Down Home Foods included for intangibles in its offer of $6,600,000? 2. Assuming Taste-T accepts this offer, which company will report Goodwill on its balance sheet and at what amount? 1. Intangibles 2.
Transcribed Image Text:M9-12 (Algo) Computing Goodwill and Patents [LO 9-6] Taste-T Company has been in business for 30 years and has developed a large group of loyal restaurant customers. Down Home Foods made an offer to buy Taste-T Company for $6,600,000. The market value of Taste-T's tangible assets, net of liabilities, on the date of the offer is $5,900,000. Taste-T also holds a patent for a fluting machine that the company invented (the patent with a market value of $350,000 was never recorded by Taste-T because it was developed internally). Required: 1. How much has Down Home Foods included for intangibles in its offer of $6,600,000? 2. Assuming Taste-T accepts this offer, which company will report Goodwill on its balance sheet and at what amount? 1. Intangibles 2.
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