In January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun company assumed all of Company A's assets and assumed Company A's liabilities. company A has assets valued at $60,000 and liabilities valued at $50,000. question: what is the amount of GOODWILL that should be recorded on Fun company's books? provide the journal entry for the acquisition of company A. Make sure to include account classifications and label debits and credits. please show work so I can understand. Thanks!

In January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun company assumed all of Company A's assets and assumed Company A's liabilities. company A has assets valued at $60,000 and liabilities valued at $50,000. question: what is the amount of GOODWILL that should be recorded on Fun company's books? provide the journal entry for the acquisition of company A. Make sure to include account classifications and label debits and credits. please show work so I can understand. Thanks!

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 10PA: Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth...

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In January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun company assumed all of Company A's assets and assumed Company A's liabilities. company A has assets valued at $60,000 and liabilities valued at $50,000. Question 2: in 2016, fun company must test for the impairment of goodwill. Assume the only goodwill on fun company's books is from the acquisition of company A. Fun company determined that the goodwill has an estimated future cash flow of $25,000 and a fair market value of $20,000. Does fun company have to recognize an impairment? Why or why not? If an impairment must be recognized, compute the impairment loss and record the journal entry. ACTUAL QUESTION: suppose that the estimated future cash flow of goodwill in question #2 is $32,000, while the fair market value continues to be $20,000. Does fun company have to recognize an impairment? Why or why not? If an impairment must be recognized, compute the impairment loss and record the…
In January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun company assumed all of Company A's assets and assumed Company A's liabilities. company A has assets valued at $60,000 and liabilities valued at $50,000. question: in 2016, fun company must test for the impairment of goodwill. Assume the only goodwill on fun company's books is from the acquisition of company A. Fun company determined that the goodwill has an estimated future cash flow of $25,000 and a fair market value of $20,000. Does fun company have to recognize an impairment? Why or why not? If an impairment must be recognized, compute the impairment loss and record the journal entry.
Melton Devices acquires Beck, a small start-up company, by paying $2,170,900 in cash on January 2. Following are the book values and fair values of Beck on the date of acquisition. (Click the icon to view the book values and fair values.) Read the requirements. Requirement a. What is the amount of goodwill acquired? The amount of goodwill acquired Requirement b. What intangible assets are acquired? Which of the intangibles have an indefinite life? Which will be amortized? What will the amortization expense be in the year after acquisition? (If an input field is not used in the table leave the field empty, do not enter a zero) Intangible Asset Finite or Indefinite Life Amortization Amortized? Expense Trial Balance Beck Book Value Fair Value Cash $ 29,000 $ 29,000 Receivables 100,700 100,650 Manufacturing Equipment 640,350 654,500 Patents (remaining life 8 years) 60,600 684,000 Trademarks 14,650 187,500 Payables 58,904 58,904 Print Done
Anton Company acquired the net assets of Hair Company on January 1, 2015, for $600,000. Using a business valuation model, the estimated value of Anton Company was $650,000 immediately after the acquisition. The fair value of Anton’s net assets was $400,000. 1. What amount of goodwill was recorded by Anton Company when it acquired Hair Company?2. Using the information, answer the questions posed in the following two independent situations: a. On December 31, 2016, there were indications that goodwill might have been impaired. At that time, the existing recorded book value of Anton Company’s net assets, including goodwill, was $500,000. The fair value of the net assets, exclusive of goodwill, was estimated to be $340,000. The value of the business was estimated to be $520,000. Is goodwill impaired? If so, what adjustment is needed? b. On December 31, 2018, there were indications that goodwill might have been impaired. At that time, the existing recorded book value of Anton Company’s net…
On September 1, 2018, Vernon Corporation acquired Barlow Enterprises for a cash payment of $820.000. At the time of purchases. Barlow's balance sheet showed assets of $610.000. liabilities of $240.000, and owner's equity of $420.000. The fair value of Barlow's assets is estimated to be 5970.000.The liabilities are all estimated to be at fair value. a) Compute the amount of goodwill acquired by Vernon. 120000 b) On December 31, 2020, the fair value of Barlow as a reporting unit is estimated to be $720.000. The carrying value of Vernon's investment in Barlow at year-end is $750.000. The fair value of Barlow's identifiable net asset, excluding the goodwill, is determined to be 655.000 Prepare Vernon's journal entry, if necessary, to record impairment of goodwill. Please use the new standard (Hint: The FASB's new goodwill Impairment testing guidance- ASU 2017-04 is required for public SEC filers for periods beginning after December 15. 2019) Note: Please use integer only. Do not use a S.…
On August 1, 2017, Concord Corporation acquired Skysong, Inc. for a cash payment of $2.10 million. At the time of purchase, Skysong's balance sheet showed assets of $4,350,000, liabilities of $2,550,000, and owners' equity of $1,800,000. The fair value of Skysong's identifiable assets is estimated to be $4,326,000. Compute the amount of goodwill acquired by Concord. Value assigned to goodwill $
Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth $4,500,000. A. What is the amount of goodwill in this transaction? B. What is Buchanans journal entry to record the purchase of McLaren? C. What journal entry should Buchanan write when the company internally generates additional goodwill in the year following the purchase of McLaren?
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.
On September 1, 2017, Winans Corporation acquired Aumont Enterprises for a cash payment of $700,000. At the time of purchase, Aumont’s balance sheet showed assets of $620,000, liabilities of $200,000, and owners’ equity of $420,000. The fair value of Aumont’s assets is estimated to be $800,000. Compute the amount of goodwill acquired by Winans.
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The general ledger of Megan Corporation as of December 31, 2018, includes the following accounts: Copyrights $ 30,000 Deposits with advertising agency (will be used to promote goodwill) 27,000 Bond sinking fund 70,000 Excess of cost over fair value of identifiable net assets of acquired subsidiary 390,000 Trademarks 120,000 In the preparation of Megan's statement of financial position as of December 31, 2018, what should be reported as total intangible assets?
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