K First Company purchased Second Company for $20,000,000 cash. At the time of purchase, Second Company's assets had a market value of $30,000,000 and the liabilities had a market value of $19,000,000. At the time of purchase, Second Company's assets had a book value of $12,000,000 and the liabilities had a book value of $8,000,000. What amount of goodwill is recorded? OA. $19,000,000 OB. $10,000,000 OC. $11,000,000 O D. $9,000,000 4.

K First Company purchased Second Company for $20,000,000 cash. At the time of purchase, Second Company's assets had a market value of $30,000,000 and the liabilities had a market value of $19,000,000. At the time of purchase, Second Company's assets had a book value of $12,000,000 and the liabilities had a book value of $8,000,000. What amount of goodwill is recorded? OA. $19,000,000 OB. $10,000,000 OC. $11,000,000 O D. $9,000,000 4.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...

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Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny Side had net assets worth $390,000. A. What is the amount of goodwill in this transaction? B. What is Farm Fresh Agriculture Companys journal entry to record the purchase of Sunny Side Egg Distribution? C. What journal entry should Farm Fresh Agriculture Company write when the company tests for impairment and determines that goodwill is worth $1,000 in the year following the purchase of Sunny Side?
On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.
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