On January 17, Lina's Co. Paid $1,600,000 for all the issued and outstanding common stock of Ralph Inc. In a transaction properly accounted for as an acquisition. The book values and fair values of Ralph's assets and liabilities on January 17, were as follows : Book Value Fair Value S 160,000 180,000 S160,000 180,000 Cash Receivables (net) Inventory Plant and equipment (net) Liabilities 300,000 920,000 315,000 820,000 (350.000) S1,125,000 (3500) S1,210,000 Net assets What is the amount of Goodwill resulting from the business combination?
On January 17, Lina's Co. Paid $1,600,000 for all the issued and outstanding common stock of Ralph Inc. In a transaction properly accounted for as an acquisition. The book values and fair values of Ralph's assets and liabilities on January 17, were as follows : Book Value Fair Value S 160,000 180,000 S160,000 180,000 Cash Receivables (net) Inventory Plant and equipment (net) Liabilities 300,000 920,000 315,000 820,000 (350.000) S1,125,000 (3500) S1,210,000 Net assets What is the amount of Goodwill resulting from the business combination?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![On January 17, Lina's Co. Paid $1,600,000
for all the issued and outstanding common
stock of Ralph Inc. In a transaction
properly accounted for as an acquisition.
The book values and fair values of Ralph's
assets and liabilities on January 17, were
as follows :
Book Value
Fair Value
S 160,000
180,000
$160,000
180,000
Cash
Receivables (net)
300,000
920,000
Inventory
Plant and equipment
(net)
Liabilities
315,000
820,000
(350.000)
(350)
S1,210,000
Net assets
S1,125,000
What is the amount of Goodwill resulting
from the business combination?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F50667297-4955-4cd4-b81c-e7248dd107df%2F9fdd9432-a570-4470-b158-ec3f84a22509%2Fv7dlzzq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 17, Lina's Co. Paid $1,600,000
for all the issued and outstanding common
stock of Ralph Inc. In a transaction
properly accounted for as an acquisition.
The book values and fair values of Ralph's
assets and liabilities on January 17, were
as follows :
Book Value
Fair Value
S 160,000
180,000
$160,000
180,000
Cash
Receivables (net)
300,000
920,000
Inventory
Plant and equipment
(net)
Liabilities
315,000
820,000
(350.000)
(350)
S1,210,000
Net assets
S1,125,000
What is the amount of Goodwill resulting
from the business combination?
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