Ask Question
11 July, 02:33

New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $70,300 in cash. The book values and market values of Red Rock's assets and liabilities were as follows:

Book Value Fair Value

Current assets $22,500 $22,800

Property, plant, and equipment 40,100 52,100

Other assets 4,800 5,400

Current liabilities 10,600 15,100

Long-term liabilities 22,400 20,900

Calculate the amount paid for goodwill.

+3
Answers (1)
  1. 11 July, 03:59
    0
    good wil 26,000

    Explanation:

    acquisition 70,300 cash

    asset book value

    22,500 + 40,100 + 4,800 = 67,400

    Liab book

    10,600 + 22,400 = 33,000

    net book value 34,400

    asset fair value

    22,800 + 52,100 + 5,400 = 80,300

    liab fair

    15,100 + 20,900 = 36,000

    net fair value 44,300

    70,300 - 44,300 = 26,000

    The assets and laib enter New Haverst Bakery account as his fair value.

    The goodwill will be the difference betwene this fair value and the amount of the acquisition.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $70,300 in cash. The book values and market values of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers