GOODWILL Problem #1: Determining Goodwill Slam Corp. purchased Dot.com Corp for $190,000 in an all cash deal. Book and fair value information for Dot.com are as follows: At Acquisition Book Fair Value Value 1/2/2011 1/2/2011 Assets Current 40,000 60,000 50,000 50,000 50,000 Equipment Patent Goodwill 100,000 150,000 Liabilities 70,000 60,000 Equity 30,000 100,000 Required: Determine goodwill valuation on the acquisition date, if any.
GOODWILL Problem #1: Determining Goodwill Slam Corp. purchased Dot.com Corp for $190,000 in an all cash deal. Book and fair value information for Dot.com are as follows: At Acquisition Book Fair Value Value 1/2/2011 1/2/2011 Assets Current 40,000 60,000 50,000 50,000 50,000 Equipment Patent Goodwill 100,000 150,000 Liabilities 70,000 60,000 Equity 30,000 100,000 Required: Determine goodwill valuation on the acquisition date, if any.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Need some assistance in completing Problem 1 and Problem 2. Thank you
Transcribed Image Text:GOODWILL
Problem #1: Determining Goodwill
Slam Corp. purchased Dot.com Corp for $190,000 in an all cash deal. Book and fair
value information for Dot.com are as follows:
At Acquisition
Book
Fair
Value
Value
1/2/2011
1/2/2011
Assets
Current
Equipment
Patent
40,000
60,000
50,000
50,000
50,000
Goodwill
100,000
150,000
Liabilities
70,000
60,000
Equity
30,000
100,000
Required: Determine goodwill valuation on the acquisition date, if any.
Problem #2: Impairment of Goodwill
On 12/31/210, the fair value of Dot.com Corp.'s net assets was $150,000. Detailed book
value and fair value information is as follows:
Book
Fair
Value
Value
12/31/2021
12/31/2021
Assets
Current
Equipment
Patent
70,000
48,000
42,000
70,000
45,000
50,000
Goodwill
100,000
260,000
Liabilities
70,000
70,000
190,000
260,000
Equity
Required: Determine the impairment of goodwill for Dot.com Corp. as of 12/31/21, if
any.
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