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ACCT 305 Live Lecture Excel Week 2

# ACCT 305 Live Lecture Excel Week 2 - GOODWILL Facts...

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GOODWILL Facts: Purchase price  2,000,000  Fair value of assets acquired  2,200,000  Fair value of liabilities acquired  500,000  Required: Calculate goodwill  Step 1: Calculate fair value of net assets Fair value of assets acquired  2,200,000  Fair value of liabilities acquired  (500,000) Fair value of net assets  1,700,000  Step 2: Subtract fair value of net assets from purchase price Purchase price  2,000,000  Less: fair value of net assets acquired  (1,700,000) Goodwill  300,000

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GOODWILL WITH EXCESS OF FAIR/BOOK VALUE Facts: Purchase price  2,000,000  E Book value of net assets  1,800,000  Differences between book value and fair value: Assets acquired:  Book Value Fair Value Difference Building  1,800,000   2,000,000   200,000  A Equipment  220,000   100,000   (120,000) B  2,020,000   2,100,000  Required: Calculate Goodwill Step 1: Calculate fair value of net assets Book value of net assets  1,800,000  D Add: excess of fair value over book value  200,000  A Less: excess of book value over fair value  (120,000) B
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