Composite Company is considering purchasing EKC Company. EKC's balance sheet at December Year is as follows:
Cash $ Current liabilities $
Accounts receivable Bonds payable
Inventory Common stock
Property, plant, and equipment net Retained earnings
$ $
On December Year Composite discovered the following about EKC:
No allowance for uncollectible accounts has been established. An allowance of $ is considered appropriate.
The LIFO inventory method has been used. The FIFO inventory method would be used if EKC were purchased by Composite. The FIFO inventory valuation of the December Year ending inventory would be $
The fair value of the property, plant, and equipment net is $
The company has an unrecorded patent that is worth $
The book values of the current liabilities and bonds payable are the same as their market values.
Compute the value of the goodwill if Composite pays $ for EKC.
