Measuring and recording goodwill Princeton has acquired several other companies. Assume that Princeton purchased Kelleher for $9,000,000 cash. The book value of Kelleher’s assets is $19,000,000 (market value, $20,000,000), and it has liabilities of $12,000,000 (market value, $12,000,000). Requirements Compute the cost of the good-will purchased by Princeton. Record the purchase of Kelleher by Princeton.
Measuring and recording goodwill Princeton has acquired several other companies. Assume that Princeton purchased Kelleher for $9,000,000 cash. The book value of Kelleher’s assets is $19,000,000 (market value, $20,000,000), and it has liabilities of $12,000,000 (market value, $12,000,000). Requirements Compute the cost of the good-will purchased by Princeton. Record the purchase of Kelleher by Princeton.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Measuring and recording
Princeton has acquired several other companies. Assume that Princeton purchased Kelleher for $9,000,000 cash. The book value of Kelleher’s assets is $19,000,000 (market value, $20,000,000), and it has liabilities of $12,000,000 (market value, $12,000,000).
Requirements
- Compute the cost of the good-will purchased by Princeton.
- Record the purchase of Kelleher by Princeton.
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