Eliz abeth pie als o 1 holds a patent for a pie c rus

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Unformatted text preview: 00. The book v alue of Eliz abeth Pie’s rec orded as s ets and liabilities on the date of the offer is $4,300,000 with a fair v alue of $4,500,000. Eliz abeth Pie als o (1) holds a patent for a pie c rus t fluting mac hine that the c ompany inv ented (the patent with a fair v alue of $300,000 was nev er rec orded by Eliz abeth Pie bec aus e it was dev eloped internally ) and (2) es timates goodwill from loy al c us tomers to be $310,000 (als o nev er rec orded by the c ompany ). If Eliz abeth Pie Company management ac c epts Giant Bak ery 's offer of $5,000,000. Compute the amount of goodwill that Giant Bak ery s hould rec ord on the date of the purc has e. (Om it the "$" sign in your response.) Goodwill $ 200,000 M8­9 Computing Goodwill and Patents LO6 Worksheet Learning Objective: 08­06 Apply measurement and reporting concepts for natural resources and intangible assets. M8-9 Computing Goodwill and Patents LO6 Eliz abeth Pie Company has been in bus ines s for 50 y ears and has dev eloped a large group of loy al res taurant c us tomers . Giant Bak ery Inc . has made an offer to buy Eliz abeth Pie Company for $5,000,000. The book v alue of Eliz abeth Pie’s rec orded as s ets and liabilities on the date of the offer is $4,300,000 with a fair v alue of $4,500,000. Eliz abeth Pie als o (1) holds a patent for a pie c rus t fluting mac hine that the c ompany inv ented (the patent with a fair v alue of $300,000 was nev er rec orded by Eliz abeth Pie bec aus e it was dev eloped internally ) and (2) es timates goodwill from loy al c us tomers to be $310,000 (als o nev er rec orded by the c ompany ). If Eliz abeth Pie Company management ac c epts Giant Bak ery 's offer of $5,000,000. Compute the amount of goodwill that Giant Bak ery s hould rec ord on the date of the purc has e. (Om it the "$" sign in your response.) Goodwill $ 200,000 ± 2% Explanation: Eliz abeth Pie Company ’s management may c hoos e to ac c ept the offer of $5,000,000 as this amount is more than the $4,800,000 mark et v alue of s eparately identifiable as s et...
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This homework help was uploaded on 02/23/2014 for the course BUSE 30000 taught by Professor N/a during the Winter '12 term at UChicago.

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