Illustration 1: Determine the value of goodwill based on 3 years purchase of last 5 years averageprofit, from the following information of a partnership firm of Nilesh and Nikunj. Last five years'profit information is as under:YearProfit2011-122,00,0002012-132,10,0002013-141,90,0002014-152,15,0002015-162,20,000

To determine the value of goodwill based on 3 years' purchase of the last 5 years' average profit,…

Answered: Illustration 1: Determine the value of…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 10RE

See similar textbooks

Similar questions

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
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…
Computation of goodwill Assume that an investor purchases 100% of an investee company for $24 million in a transaction that qualifies as a business combination. The fair values of the identifiable net assets are as follows: Tangible net assets: Receivables, inventories, PPE, payables, and accruals $8 million Intangible assets: Patents, customer lists, trade name, software, etc. 5 million Research and development assets: Research projects in process at the investee company 6 million In addition to the purchase price, the Investor also incurs acquísition-related costs amounting to $1.8 million for professional fees and the internal allocation of overhead relating to the purchase. a. How much of the purchase price is assigned to Goodwill? $4 million
Determine the consolidated balances of the cost of goods sold account in the year 20x6.
Calculate the amount paid for goodwill? General accounting
Kindly help me with general accounting question
Naughty Company assembles 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, 000Liabilities 900, 000Shareholders’ equity 1, 700, 000 Net earnings after elimination of unusual or infrequent items:2008 200, 0002009 230, 0002010 300, 0002011 250, 0002012 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 normal on net assets at fair value. Excess earnings are expected to…
i need the answer quickly
Subject - account Please help me. Thankyou.
Immediately prior to the admission of Abbott, the Smith-Jones Partnership determines that equipment that cost $20,000, with accumulated depreciation of $5,000, has a current market value of $12,000. Assuming an asset revaluation account is used, the journal entry to revalue the equipment will include a.a credit to Accumulated Depreciation of $3,000 b.a debit to Asset Revaluation of $3,000 c.a debit to Asset Revaluation of $12,000 d.a credit to Equipment of $3,000
Accounting what is the taxable income
An asset's book value is $18,600 on December 31, Year 5. Assuming the asset is sold on December 31, Year 5 for $14,400, the company should record: Multiple Choice A gain on sale of $13,200. Neither a gain nor a loss is recognized on this transaction. A loss on sale of $4,200. A loss on sale of $13,200. A gain on sale of $4,200.

SEE MORE QUESTIONS

Recommended textbooks for you

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

SWFT Comprehensive Volume 2019

Accounting

ISBN:

9780357233306

Author:

Maloney

Publisher:

Cengage

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

SWFT Comprehensive Volume 2019

Accounting

ISBN:

9780357233306

Author:

Maloney

Publisher:

Cengage

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS