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Goodwill - $270,000 Buyer Co is purchasing the Assets of...

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Goodwill Example $1,250,000 Assets Liabilities Cash $140,000 Accounts Payable $100,000 Accounts Receivable 210,000 Notes Payable 1,800,000 Inventory 430,000 Total Liabilities $1,900,000 Property and Equipment $2,500,000 Accumulated Depreciation (800,000) Net Property and Equipment $1,700,000 1,700,000 Total Assets $2,480,000 Cash $140,000 Dr Cr Accounts Receivable 210,000 Cash 140,000 Inventory 430,000 Accounts Receivable 210,000 Prop. and Equipment 2,100,000 Inventory 430,000 Assets at Fair Value $2,880,000 Property and Equipment 2,100,000 Goodwill 270,000 Accounts Payable 100,000 Notes Payable 1,800,000 Calculation of Goodwill Cash 1,250,000 3,150,000 3,150,000 $1,250,000 1,900,000 Total Paid (now + future) 3,150,000 Less Assets Acquired (2,880,000) Amount Paid for Goodwill
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Unformatted text preview: $270,000 Buyer Co. is purchasing the Assets of Seller Co. as of January 1, 2010. As part of the purchase Buyer Co. will assume the liabilities of Seller Co. and pay-off these liabilities in the future. Cash paid now by Buyer Co . for Seller Co. On January 1, 2010 the Asset and Liability account balances on Seller Co's books were as follows: Fair Value is equal to Seller Co's Book Value for all Assets and Liabilities except for Property and Equipment. The appraised fair value of Seller Co's Property and Equipment as of January 1, 2010 is $2,100,000 Seller Co's Assets at Fair Value Entry on Buyer Co's Books Cash Paid now for Seller Co + Liabilities Assumed ( paid in the futue)...
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