New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $68,000 in cash. The book values and fair values of Red Rock's assets and liabilities were as follows: Current assets Property, plant, and equipment Other assets Current liabilities Long-term liabilities Required: Calculate the amount paid for goodwill. Goodwill Book Value $ 24,000 44,000 4,000 16,000 24,000 Fair Value $30,000 56,000 6,000 16,000 22,000

New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $68,000 in cash. The book values and fair values of Red Rock's assets and liabilities were as follows: Current assets Property, plant, and equipment Other assets Current liabilities Long-term liabilities Required: Calculate the amount paid for goodwill. Goodwill Book Value $ 24,000 44,000 4,000 16,000 24,000 Fair Value $30,000 56,000 6,000 16,000 22,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $68,000 in cash. The book values and fair
values of Red Rock's assets and liabilities were as follows:
Current assets
Property, plant, and equipment
Other assets
Current liabilities
Long-term liabilities.
Required:
Calculate the amount paid for goodwill.
Goodwill
Book Value
$ 24,000
44,000
4,000
16,000
24,000
Fair Value
$30,000
56,000
6,000
16,000
22,000

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