Fresh Cut Corporation purchased all the outstanding common stock of Premium Meats for $12,000,000 in cash. The book values and fair values of Premium Meats’ assets and liabilities were Book Value Fair ValueAccounts Receivable $ 1,800,000 $ 1,600,000Equipment 8,500,000 9,900,000Patents 300,000 1,700,000Notes Payable (2,700,000) (2,700,000)Net assets $ 7,900,000 $ 10,500,000Required:1. Calculate the amount Fresh Cut should report for goodwill.2. Record Fresh Cut’s acquisition of Premium Meats.
Fresh Cut Corporation purchased all the outstanding common stock of Premium Meats for $12,000,000 in cash. The book values and fair values of Premium Meats’ assets and liabilities were
Book Value Fair Value
Accounts Receivable $ 1,800,000 $ 1,600,000
Equipment 8,500,000 9,900,000
Patents 300,000 1,700,000
Notes Payable (2,700,000) (2,700,000)
Net assets $ 7,900,000 $ 10,500,000
Required:
1. Calculate the amount Fresh Cut should report for
2. Record Fresh Cut’s acquisition of Premium Meats.
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