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Part 1: Smith acquired all of the stock of Jones Co. on January 1,2022 for $3.2M. It is still January 1, 2022. Requirement A: Please compute the goodwill (show work somewhere on this page) that is part of this transaction. The investment in Sub recorded on 5 mith's books is $3.2M since that was the purchase price. In the course notes under Case t2 it says that the balance in the investor's ( 5 mith) Investment account is the book value of the investee's stockholder's equity (column B) plus any fair value differences on the balance sheet (column D) minus intercompany deferred gains. We don't have any intercompany transactions so we can ignore that part for now, but we do have some fair value differences. Requirement B: Please indicate what part of the 3.2M is from Jones Co:s Stockholder's Equity and what part of the 3.2M is from the unrecorded assets of Jones Co. Stockholder's Equity of jones: Unrecorded or under/over recorded assets and liabilities of Jones (aka AAP): Total: 975000 2225000 3200000 Cell 816 should be 3.2M (the purchase price) before you turn this Assets: Cash Accounts receivable inventory Property, plant and equipment (PPE), net Ucense Agreement Customer Ust Goodwill Uabilities and stockholders equity Accounts payable Accrued liabilities Long-term liabilities Total Habilities 5. Net Assets Part 1: Smith acquired all of the stock of Jones Co. on January 1,2022 for $3.2M. It is still January 1, 2022. Requirement A: Please compute the goodwill (show work somewhere on this page) that is part of this transaction. The investment in Sub recorded on 5 mith's books is $3.2M since that was the purchase price. In the course notes under Case t2 it says that the balance in the investor's ( 5 mith) Investment account is the book value of the investee's stockholder's equity (column B) plus any fair value differences on the balance sheet (column D) minus intercompany deferred gains. We don't have any intercompany transactions so we can ignore that part for now, but we do have some fair value differences. Requirement B: Please indicate what part of the 3.2M is from Jones Co:s Stockholder's Equity and what part of the 3.2M is from the unrecorded assets of Jones Co. Stockholder's Equity of jones: Unrecorded or under/over recorded assets and liabilities of Jones (aka AAP): Total: 975000 2225000 3200000 Cell 816 should be 3.2M (the purchase price) before you turn this Assets: Cash Accounts receivable inventory Property, plant and equipment (PPE), net Ucense Agreement Customer Ust Goodwill Uabilities and stockholders equity Accounts payable Accrued liabilities Long-term liabilities Total Habilities 5. Net Assets

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