On June 1, Cline Co. paid $870,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying amounts for Renn’s assets and liabilities on June 1 follow: Cash$239,000 Accounts receivable 181,000 Capitalized software costs 340,000 Goodwill 103,000 Liabilities (226,000)Net assets$637,000 On June 1, Renn’s accounts receivable had a fair value of $136,000. Additionally, Renn’s in-process research and development was estimated to have a fair value of $253,000. All other items were stated at their fair values. On Cline’s June 1 consolidated balance sheet, how much is reported for goodwill? Multiple Choice $340,000. $20,000. $128,000. $83,000.

Formula: Net Assets = Total Assets - liabilities Goodwill = Total cash paid - Fair value of net…

Answered: On June 1, Cline Co. paid $870,000 cash…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

100%

On June 1, Cline Co. paid $870,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying amounts for Renn’s assets and liabilities on June 1 follow:


Cash	$	239,000
Accounts receivable		181,000
Capitalized software costs		340,000
Goodwill		103,000
Liabilities		(226,000	)
Net assets	$	637,000

On June 1, Renn’s accounts receivable had a fair value of $136,000. Additionally, Renn’s in-process research and development was estimated to have a fair value of $253,000. All other items were stated at their fair values. On Cline’s June 1 consolidated balance sheet, how much is reported for goodwill?

Multiple Choice