Gulf Company purchases Arab Company for $900,000 cash on January 2, 2019. The book value of Arab Company's net assets, as reflected on its December 31, 2018 balance sheet is $720,000. An analysis by Gulf on December 31, 2018 indicates that the fair value of Arab’s tangible assets exceed the book value by $60,000, and the fair value of indefinite intangible assets exceed book value by $55,000. How much goodwill should recognized by Gulf company when recording the purchase of Arab Company? a. $98,000. b. $130,000. c. $-0-. d. $65,000.

Gulf Company purchases Arab Company for $900,000 cash on January 2, 2019. The book value of Arab Company's net assets, as reflected on its December 31, 2018 balance sheet is $720,000. An analysis by Gulf on December 31, 2018 indicates that the fair value of Arab’s tangible assets exceed the book value by $60,000, and the fair value of indefinite intangible assets exceed book value by $55,000. How much goodwill should recognized by Gulf company when recording the purchase of Arab Company? a. $98,000. b. $130,000. c. $-0-. d. $65,000.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...

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