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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 5
Measuring and recording goodwill
Potters, Inc., has acquired several other companies. Assume that Potters purchased Kittery, Co., for $6,000,000 cash. The book value of Kittery's assets is $12,000,000 (market value, $15,000,000), and it has liabilities of $11,000,000.
Requirements
1. Compute the cost of the goodwill purchased by Potters.
2. Record the purchase of Kittery by Potters.
Potters, Inc., has acquired several other companies. Assume that Potters purchased Kittery, Co., for $6,000,000 cash. The book value of Kittery's assets is $12,000,000 (market value, $15,000,000), and it has liabilities of $11,000,000.
Requirements
1. Compute the cost of the goodwill purchased by Potters.
2. Record the purchase of Kittery by Potters.
Explanation
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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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