Answered: Cash .... Accounts receivable..…

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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Question

On June 1, Cline Co. paid $800,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying amounts for Renn’s assets and liabilities on June 1 follow:
On June 1, Renn’s accounts receivable had a fair value of $140,000. Additionally, Renn’s in-process research and development was estimated to have a fair value of $200,000. All other items were stated at their fair values. On Cline’s June 1 consolidated balance sheet, how much is reported for goodwill?
a. $320,000
b. $120,000
c. $80,000
d. $20,000

Cash ....
Accounts receivable..
Capitalized software costs
Goodwill ....
Liabilities...
Net assets
$150,000
320,000
100,000
(130,000)
$620,000

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