Accounting for intangiblesMidland States Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Midland States Telecom purchased goodwill as part of the acquisition of Sheldon Wireless Enterprises, which had the following figures:RequirementsJournalize the entry to record Midland States Telecom’s purchase of Sheldon Wireless for $440,000 cash plus a $660,000 note payable.What special asset does Midland States Telecom’s acquisition of Sheldon Wireless identify? How should Midland States Telecom account for this asset after acquiring Sheldon Wireless? Explain in detail. Book value of assetsMarket value of assetsMarket value of iabilities$ 900,0001,400,000530,000

Calculation of Goodwill: Particulars Amount Purchase price to acquire Sheldon Wireless…

Answered: Book value of assets Market value of…

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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Accounting for intangibles

Midland States Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Midland States Telecom purchased goodwill as part of the acquisition of Sheldon Wireless Enterprises, which had the following figures:

Requirements

Journalize the entry to record Midland States Telecom’s purchase of Sheldon Wireless for $440,000 cash plus a $660,000 note payable.
What special asset does Midland States Telecom’s acquisition of Sheldon Wireless identify? How should Midland States Telecom account for this asset after acquiring Sheldon Wireless? Explain in detail.

Book value of assets
Market value of assets
Market value of iabilities
$ 900,000
1,400,000
530,000

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