Part A On May 31 2018 Griffin Company paid 3500000 to acquir

Part A On May 31, 2018, Griffin Company paid $3,500,000 to acquire Wright Corporation, which became the Wright Division of Griffin. Wright reported the following balance sheet at the time of the acquisition: Cash Accounts Receivable 700,000 Equipment (net) Building (net) 600,000 500,000 S 900,000 Current iabilities Long-term liabilities 500,000 1500000 Stockholders\' equity Total liabilities and Total assets $3,600,000 stockholders\' equity $3.0.000 At the date of the purchase it was determined that the carrying value of the assets and liabilities of Wright were equal to their fair values except that the Building was undervalued by $600,000. REQUIRED: Compute the amount of goodwill recognized, if any, on May 31, 2018 and prepare the journal entry Part B: At December 31, 2019, the Wright Division reports the following balance sheet information: Cash Accounts Receivable Equipment (net) Building Goodwill $ 700,000 500,000 450,000 1,890,000 Current liabilities Long-term liabilities 800,000 700,000 It is determined that the fair value of the Wright Division is $2,700,000. The recorded amount for Wright Division\'s assets and liabilities are the same as fair value, except for Equipment, which has a fair value of $50,000 above the carrying value.

Solution

400,000.00

B)

calculation of goodwill
Cash	900,000.00
Accounts receivable	700,000.00
Equipment	500,000.00
Bulding (revalued)	2100,000.00
Less:Current liability	600,000.00
Less:Long term liability	500,000.00
Less: Puchase considerartion	3,500,000.00
Goodwill:	400,000.00