Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume that you are charged with assigning fair values related to a $6,080,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $2,960,000 You also conclude that the purchase included a Customer List with a fair value at $544,000. a. How much Goodwill will you record in this acquisition? $ 2,576,000 b. Continuing from part (a), now also assume that the purchase and sale agreement requires the payment of an additional $1,480,000 if the subsidiary achieves a certain level of earnings. You estimate the fair value of that contingent earnings clause in the agreement to be $352,000. How does this additional information affect your computation of Goodwill The amount of Goodwill recorded is $ 2,928,000 c. This part of the exercise is independent of parts (a) and (b). Assume that the purchase price is $6,080,000 and that fair value of the net identifiable tangible assets is $2.960,000. You also conclude that the purchase included a Customer List that you value at $1,024,000 and a Patent valued at $3,040,000 How much Goodwill will you record in this acquisition? 0 The amount of Goodwill recorded is: $ 944,000 Check x
Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume that you are charged with assigning fair values related to a $6,080,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $2,960,000 You also conclude that the purchase included a Customer List with a fair value at $544,000. a. How much Goodwill will you record in this acquisition? $ 2,576,000 b. Continuing from part (a), now also assume that the purchase and sale agreement requires the payment of an additional $1,480,000 if the subsidiary achieves a certain level of earnings. You estimate the fair value of that contingent earnings clause in the agreement to be $352,000. How does this additional information affect your computation of Goodwill The amount of Goodwill recorded is $ 2,928,000 c. This part of the exercise is independent of parts (a) and (b). Assume that the purchase price is $6,080,000 and that fair value of the net identifiable tangible assets is $2.960,000. You also conclude that the purchase included a Customer List that you value at $1,024,000 and a Patent valued at $3,040,000 How much Goodwill will you record in this acquisition? 0 The amount of Goodwill recorded is: $ 944,000 Check x
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
100%
M1.)
Transcribed Image Text:Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase
Assume that you are charged with assigning fair values related to a 56,080,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $2,960,000 You also conclude
that the purchase included a Customer List with a fair value at $544,000.
a. How much Goodwill will you record in this acquisition?
$ 2,576,000
b. Continuing from part (a), now also assume that the purchase and sale agreement requires the payment of an additional $1,480,000 if the subsidiary achieves a certain level of earnings. You
estimate the fair value of that contingent earnings clause in the agreement to be $352,000. How does this additional information affect your computation of Goodwill
The amount of Goodwill recorded is s 2,928,000
c. This part of the exercise is independent of parts (a) and (b). Assume that the purchase price is $6,080,000 and that fair value of the net identifiable tangible assets is $2.960,000. You also
conclude that the purchase included a Customer List that you value at $1,024,000 and a Patent valued at $3,040,000. How much Goodwill will you record in this acquisition?
The amount of Goodwill recorded is: $ 944,000
Check
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education