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w2 homework answers - Chapter 10 Homework Exercise 10-7...

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Chapter 10 Homework Exercise 10-7 Calculation of goodwill: Consideration exchanged \$11,000,000 Less fair value of net assets: Book value of net assets \$7,800,000 Plus: Fair value in excess of book value: Property, plant, and equipment 1,400,000 Intangible assets 1,000,000 Less: Book value in excess of fair value: Receivables (200,000 ) 10,000,000 Goodwill \$ 1,000,000

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Problem 10-4 To reclassify various expenditures incorrectly charged to the intangible asset account. Organization cost expense ............................................................... 7,000 Prepaid insurance ............................................................................. 6,000 Copyright ......................................................................................... 20,000 Research and development expense ................................................. 40,000 Patent (\$3,000 + 12,000) .................................................................. 15,000 Franchise .......................................................................................... 40,000 Advertising expense ......................................................................... 16,000 ................................................................................ Intangible asset ............................................................................................ 144,000 To reclassify amount paid for Stiltz Corp. incorrectly charged to the intangible asset account. Receivables ...................................................................................... 100,000 Equipment ........................................................................................ 350,000 Patent ............................................................................................... 150,000 Goodwill (determined below) .......................................................... 120,000 .................................................................................... Note payable ............................................................................................ 220,000 ................................................................................ Intangible asset ............................................................................................
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