Vasquez Manufacturing Company decided to expand further by purchasing Wasserman Company. The balance sheet of Wasserman Company as of December 31, 2015 was as follows: An appraisal, agreed to by the parties, indicated that the fair value of the inventory was $370,000 and that the fair value of the plant assets was $1,325,000. The fair value of the receivables is equal to the amount reported on the balance sheet. The agreed purchase price was $2,275,000, and this amount was paid in cash to the previous owners of Wasserman Company.

Instructions
Determine the amount of goodwill (if any) implied in the purchase price of $2,275,000. Show calculations.

Question

Vasquez Manufacturing Company decided to expand further by purchasing Wasserman Company. The balance sheet of Wasserman Company as of December 31, 2015 was as follows:

An appraisal, agreed to by the parties, indicated that the fair value of the inventory was $370,000 and that the fair value of the plant assets was $1,325,000. The fair value of the receivables is equal to the amount reported on the balance sheet. The agreed purchase price was $2,275,000, and this amount was paid in cash to the previous owners of Wasserman Company.

Instructions
Determine the amount of goodwill (if any) implied in the purchase price of $2,275,000. Show calculations.

Instructions
Determine the amount of goodwill (if any) implied in the purchase price of $2,275,000. Show calculations.

Quizplus · Accepted Answer

The Answer of Vasquez Manufacturing Company decided to expand further by purchasing Wasserman Company. The balance sheet of Wasserman Company as of December 31, 2015 was as follows:  An appraisal, agreed to by the parties, indicated that the fair value of the inventory was $370,000 and that the fair value of the plant assets was $1,325,000. The fair value of the receivables is equal to the amount reported on the balance sheet. The agreed purchase price was $2,275,000, and this amount was paid in cash to the previous owners of Wasserman Company.

Instructions
Determine the amount of goodwill (if any) implied in the purchase price of $2,275,000. Show calculations.

Vasquez Manufacturing Company Decided to Expand Further by Purchasing Wasserman