On March 31, 2024, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $17,500,000 in cash. The book values and fair values of Barney’s assets and liabilities were as follows: Book Value Fair Value Current assets $ 6,500,000 $ 8,000,000 Property, plant, and equipment 11,500,000 14,500,000 Other assets 1,050,000 1,550,000 Current liabilities 4,500,000 4,500,000 Long-term liabilities 6,500,000 6,000,000 Required: Calculate the amount paid for goodwill.
On March 31, 2024, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $17,500,000 in cash. The book values and fair values of Barney’s assets and liabilities were as follows: Book Value Fair Value Current assets $ 6,500,000 $ 8,000,000 Property, plant, and equipment 11,500,000 14,500,000 Other assets 1,050,000 1,550,000 Current liabilities 4,500,000 4,500,000 Long-term liabilities 6,500,000 6,000,000 Required: Calculate the amount paid for goodwill.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On March 31, 2024, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $17,500,000 in cash. The book values and fair values of Barney’s assets and liabilities were as follows:
| Book Value | Fair Value | |
|---|---|---|
| Current assets | $ 6,500,000 | $ 8,000,000 |
| Property, plant, and equipment | 11,500,000 | 14,500,000 |
| Other assets | 1,050,000 | 1,550,000 |
| Current liabilities | 4,500,000 | 4,500,000 |
| Long-term liabilities | 6,500,000 | 6,000,000 |
Required:
Calculate the amount paid for
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