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25 June, 06:18

The balance sheet of Flo's Restaurant showed total assets of $320,000, liabilities of $88,000 and stockholders' equity of $282,000. An appraiser estimated the fair value of the restaurant assets at $365,000. If Alice Company pays $425,000 cash for the restaurant, what is the amount of goodwill? Multiple Choice $105,000 $148,000 $143,000 $60,000

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  1. 25 June, 07:27
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    The answer is $148,000

    Explanation:

    Goodwill comes into effect or arises when a company acquires another company. Goodwill is an intangible asset. It is difference between the purchase price of a company and the net asset (total assets minus total liability)

    Purchase price is $425,000

    Fair value of the asset is $365,000

    Total liability is $88,000.

    Net asset = $365,000 - $88,000

    =$277,000

    Therefore, goodwill is $425,000 - $277,000

    = $148,000
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Home » Business » The balance sheet of Flo's Restaurant showed total assets of $320,000, liabilities of $88,000 and stockholders' equity of $282,000. An appraiser estimated the fair value of the restaurant assets at $365,000.
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