Taste-T Company has been in business for 30 years and has developed a large group of loyal restaurant customers. Down Home Foods made an offer to buy Taste-T Company for $6,800,000. The market value of Taste-T's tangible assets, net of liabilities, on the date of the offer is $6,000,000. Taste-T also holds a patent for a fluting machine that the company invented (the patent with a market value of $400,000 was never recorded by Taste-T because it was developed internally). Required: 1. How much has Down Home Foods included for intangibles in its offer of $6,800,000? 2. Assuming Taste-T accepts this offer, which company will report Goodwill on its balance sheet and at what amount? 1 Intangibles 2
Taste-T Company has been in business for 30 years and has developed a large group of loyal restaurant customers. Down Home Foods made an offer to buy Taste-T Company for $6,800,000. The market value of Taste-T's tangible assets, net of liabilities, on the date of the offer is $6,000,000. Taste-T also holds a patent for a fluting machine that the company invented (the patent with a market value of $400,000 was never recorded by Taste-T because it was developed internally). Required: 1. How much has Down Home Foods included for intangibles in its offer of $6,800,000? 2. Assuming Taste-T accepts this offer, which company will report Goodwill on its balance sheet and at what amount? 1 Intangibles 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Taste-T Company has been in business for 30 years and has developed a large group of loyal restaurant customers, Down Home
Foods made an offer to buy Taste-T Company for $6,800,000. The market value of Taste-T's tangible assets, net of liabilities, on the
date of the offer is $6,000,000. Taste-T also holds a patent for a fluting machine that the company invented (the patent with a market
value of $400,000 was never recorded by Taste-T because it was developed internally).
Required:
1. How much has Down Home Foods included for intangibles in its offer of $6,800,000?
2. Assuming Taste-T accepts this offer, which company will report Goodwill on its balance sheet and at what amount?
1. Intangiblos
2
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