Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $35,000,000 in cash. The book values and fair values of Iceberg's assets and liabilities were as follows: Fair Value $13,200,000 28,800,000 3,000,000 6,200,000 9,800,000 Book Value Current assets Property, plant, and equipment Other assets $10,200,000 22,800,000 2,000,000 6,200,000 10,800,000 Current liabilities Long-term liabilities Required: Calculate the amount paid for goodwill. (Enter your answer in millions (i.e. 5,000,000 should be entered as 5).) Amount paid for goodwill $ 6,000,000 million

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $35,000,000 in cash. The book values and fair values of Iceberg’s assets and liabilities were as follows:

|                          | Book Value | Fair Value  |
|--------------------------|------------|-------------|
| Current assets           | $10,200,000 | $13,200,000 |
| Property, plant, and equipment | $22,800,000 | $28,800,000 |
| Other assets             | $2,000,000  | $3,000,000  |
| Current liabilities      | $6,200,000  | $6,200,000  |
| Long-term liabilities    | $10,800,000 | $9,800,000  |

**Required:**
Calculate the amount paid for goodwill. (Enter your answer in millions, i.e., 5,000,000 should be entered as 5.)

**Solution:**
The amount paid for goodwill is $6,000,000 (entered as 6 million).
Transcribed Image Text:Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $35,000,000 in cash. The book values and fair values of Iceberg’s assets and liabilities were as follows: | | Book Value | Fair Value | |--------------------------|------------|-------------| | Current assets | $10,200,000 | $13,200,000 | | Property, plant, and equipment | $22,800,000 | $28,800,000 | | Other assets | $2,000,000 | $3,000,000 | | Current liabilities | $6,200,000 | $6,200,000 | | Long-term liabilities | $10,800,000 | $9,800,000 | **Required:** Calculate the amount paid for goodwill. (Enter your answer in millions, i.e., 5,000,000 should be entered as 5.) **Solution:** The amount paid for goodwill is $6,000,000 (entered as 6 million).
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