Corporation purchased Tiny Blazer Enterprises for $2,350,000. Tiny Enterprises had assets with a fair value of $1,850,000, and liabilities with a fair value of $350,000. Use this information to determine the dollar value of goodwill.
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- Answer the following:On May 1, Soriano Company reported the following account balances along with their estimated fair values: Carrying Amount $ 245,300 79,200 Fair Value $ 245,300 79,200 505,500 658,000 125,500 875,000 $ 1,325,000 $ 1,488,000 $ 253,000 729,800 Account Receivables Inventory Copyrights Patented technology Total assets Current liabilities Long-term liabilities Common stock Retained earnings $ 253,000 740,000 100,000 232,000 $ 1,325,000 On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $100,000 to an investment banking firm. The following information was also available: • Zambrano further agreed to pay an extra $71,200 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $35,600. • Soriano has a research and…Calculate the total goodwill for a pro forma balance sheet given the following details. Details: Equity purchase price: $2,000 Book value: $1,700 Existing goodwill: $100 A. $100 B. $300 C. $200 D. $400
- Topic: Intangible Assets (Goodwill) England Company assembled the following data relative to a certain entity in determining the amount to be paid for net assets and goodwill: Assets at fair value before goodwill 2,600,000 Liabilities 900,000 Shareholders' Equity 1,700,000 Net Earnings after elimination of unusual or infrequent items: 2017 200,000 2018 230,000 2019 300,000 2020 250,000 2021 270,000 Required: Calculate the amount of goodwill under the following: 1. Average earnings are capitalized at 10%. 2. A return of 8% is considered normal on net assets at fair value. Excess earnings are capitalized at 15%. 3. A return of 10% is considered normal on net assets at fair value. Goodwill is measured at 5 years excess earnings. 4. A return of 10% is considered…Which statement regarding goodwill is true? a. goodwill is an unidentifiable intangible assetb. internally developed goodwill should be capitalized while purchased goodwill should beexpensedc. goodwill can be defined as the value attached to the ability of a company to earn a higherthan normal rate of return on the book value of its identifiable assetsd. in some situations, FASB Statement No. 141 requires that negative goodwill be recordedSubject: accounting
- Ma ic Calendar My MCBS Library English (en) - Assets acquired in a lump-sum purchase are valued based on: a. Their assessed valuation. b. Their relative fair values. c. The present value of their future cash flows. d. Their cost plus the difference between their cost and fair values.??Compute the amount of acquired Goodwill, including contingent earnings and bargain purchase Assume that you are charged with assigning fair values related to a $3,800,000 acquisition. You determine that the fair value of the net identifiable tangible assets is $1,850,000. You also conclude that the purchase included a Customer List with a fair value at $340,000. a. How much Goodwill will you record in this acquisition? $ 1,610,000 ✓ b. Continuing from part (a), now also assume that the purchase and sale agreement requires the payment of an additional $925,000 if the subsidiary achieves a certain level of earnings. You estimate the fair value of that contingent earnings clause in the agreement to be $220,000. How does this additional information affect your computation of Goodwill? The amount of Goodwill recorded is $ 1,830,000 c. This part of the exercise is independent parts (a) and (b). Assume that the purchase price is $3,800,000 and that fair value of the net identifiable tangible…
- Answer the Question below Under which basis should companies record donated assets in their books? a) Nominal value of $1 b) Donor's book value c) Fair market value at receipt d) Replacement cost value.Under which basis should companies record donated assets in their books?The reason goodwill is sometimes referred to as a master valuation account is because a. it represents the purchase price of a business that is about to be sold.b. it is the difference between the fair market value of the net tangible and identifiableintangible assets as compared with the purchase price of the acquired business.c. the value of a business is computed without consideration of goodwill and thengoodwill is added to arrive at a master valuation.d. it is the only account in the financial statements that is based on value, all otheraccounts are recorded at an amount other than their value.