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  3. purchased goodwill. company a has the following ne

Purchased goodwill. Company A has the following net assets: Assets ...

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Question

Accounting

Purchased goodwill.

Company A has the following net assets:

Assets

Carrying Value

Liabilities & Equity

Carrying Value

Cash

$25,000

Current liabilities

$55,000

Accounts receivable

35,000

Common stock

100,000

Inventory

42,000

Retained earnings

100,000

PPE (net)

153,000

Totals

$255,000

$255,000

The fair values of Company A are

Assets

Fair Value

Cash

$25,000

Accounts receivable

35,000

Inventory

122,000

PPE (net)

205,000

Patents

18,000

Liabilities

(55,000)

Fair value of net assets

$350,000

Company B purchases Company A for $400,000. Write the journal entry to record the purchase.

Date

Account

Debit

Credit

Answer & Explanation Solved by verified expert
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