Star Company purchases Stripe Inc. for $13,985,000 cash on January 1, 2024. The book value of Stripe Inc. net assets reported on its December 31, 2023 statement of financial position was $12,620,000. Star’s December 31, 2023 analysis indicated that the fair value of Stripe’s tangible assets exceeded the book value by $560,000, and the fair value of identifiable intangible assets exceeded book value by $245,000. How much goodwill should be recognized by Star Company when recording the purchase of Stripe Inc.? $

Star Company purchases Stripe Inc. for $13,985,000 cash on January 1, 2024. The book value of Stripe Inc. net assets reported on its December 31, 2023 statement of financial position was $12,620,000. Star’s December 31, 2023 analysis indicated that the fair value of Stripe’s tangible assets exceeded the book value by $560,000, and the fair value of identifiable intangible assets exceeded book value by $245,000. How much goodwill should be recognized by Star Company when recording the purchase of Stripe Inc.? $

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 8P

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On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.
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Zebra Company purchases Glow Inc. for $13,985,000 cash on January 1, 2023. The book value of Glow Inc. net assets reported on its December 31, 2022 statement of financial position was $12,620,000. Zebra’s December 31, 2022 analysis indicated that the fair value of Glow’s tangible assets exceeded the book value by $560,000, and the fair value of identifiable intangible assets exceeded book value by $245,000. How much goodwill should be recognized by Zebra Company when recording the purchase of Glow Inc
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