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View History Bookmarks Window Help canvas.highline.edu Question 14 2 pts by P ulada based Eastern Star purchased the entire business of South Park for $1850, 000. ars ag the following was revealed in the accounting records 0001p book value FMV 600K 1.3M over s cash AR inventory 500K Other assets 250K AP Other liabilities 200K What is goodwill 600K s the old 1.3M 770K 325K 1.1M s Bmo moved a cou has a ter brick-ow 1.1M 200K a few of e that statist patient-focus O 115000 O 155000 O none of the above e a few of nibe DATA/new d Bailey store pro under con-.. o make use of ... 12

Solution

Correct Answer $ 155000

Calculation

Fair value of South park

Cash

$      600,000.00

Accounts Receivables

$ 1,300,000.00

Inventory

$      770,000.00

Other Assets

$      325,000.00

Total Assets Acquired

$ 2,995,000.00

Less: Liabilities taken over

Accounts Payable

$ 1,100,000.00

Other Liabilities

$      200,000.00

Total Liabilities taken over

$ 1,300,000.00

(A) Fair value of South park

$ 1,695,000.00

(B) Purchase Consideration paid

$ 1,850,000.00

(B-A) Goodwill

$      155,000.00

Goodwill is the amount paid Over and above net assets undertaken.

Fair Marvet value of assets will be taken for calculations.

Fair value of South park
Cash	$      600,000.00
Accounts Receivables	$ 1,300,000.00
Inventory	$      770,000.00
Other Assets	$      325,000.00
Total Assets Acquired	$ 2,995,000.00
Less: Liabilities taken over
Accounts Payable	$ 1,100,000.00
Other Liabilities	$      200,000.00
Total Liabilities taken over	$ 1,300,000.00
(A) Fair value of South park	$ 1,695,000.00
(B) Purchase Consideration paid	$ 1,850,000.00
(B-A) Goodwill	$      155,000.00