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Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng
Edition 11ISBN: 978-0538480284Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng
Edition 11ISBN: 978-0538480284 Exercise 7
Simple value analysis. Flom Company is considering the cash purchase of 100% of the outstanding stock of Vargas Company. The terms are not set, and alternative prices are being considered for negotiation. The balance sheet of Vargas Company shows the following values: 
Appraisals reveal that the inventory has a fair value of $160,000 and that the land and building have fair values of $120,000 and $300,000, respectively.
1. Above what price will goodwill be recorded?
2. Below what price will a gain be recorded?
Appraisals reveal that the inventory has a fair value of $160,000 and that the land and building have fair values of $120,000 and $300,000, respectively.
1. Above what price will goodwill be recorded?
2. Below what price will a gain be recorded?
Explanation
Verified
Verified
Calculate net increase in land value.
It...
Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng
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