On December 31, Bar Company purchased all the outstanding common stock of Sim Company by...
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Accounting
On December 31, Bar Company purchased all the outstanding common stock of Sim Company by borrowing $8,000,000. Sim's net assets on December 31 were on the books with a net value of $7,000,000. Fair market values equaled book value for all net assets with the expectation of property, plant, and equipment, which had a fair value that exceeded its carrying amount by $1,100,000. Explain how Bar Company should treat the concept of goodwill for the December 31st purchase on their year end December 31st financial statements.
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