I'm very lost on how to solve this.
Rock Solid Manufacturing, Inc., has acquired the net assets
of Jelly Soft Manufacturing, Inc., for $10 million and now needs to address how the acquisition should be recorded on its books for financial reporting purposes and which intangible assets must be amortized and which must be tested for impairment in the future.
Given the information provided below, solve for the goodwill amount then allocate the purchase price of $10 million to the appropriate assets acquired and liabilities assumed in accordance with ASC 805 - Business Combinations. Then identify which assets are tangible and which are intangible. Identify which intangible assets must be amortized and which must be tested for impairment in the future.
Cash - $800
Accounts receivable - $1,500
Inventory - $850
Equipment - $500
Building - $1,200
Customer relationships (finite life) - $2,300
Patents (finite life) - $600
Trademarks (indefinite life) - $400
Goodwill - (solve for)
Accounts payable - $500
Accrued payroll - $50
Note payable - bank - $950
Recently Asked Questions
- Here are the financial statements for a non-profit entity: Statement of Operations and Change in Net Assets as of December 31, 2018 (in $000's) Revenue:
- Here are selected entries for Urgent Care Center for December 31, 2018, presented in alphabetical order. Accounts payable$30,000 Accounts Receivable Net$70,000
- Clinic had total assets of $750,000 and an equity balance of $400,000 at year ending June 30, 2018. One year later, at year ending June 30, 2019, the clinic