ABC Company purchased XYZ Company for $3,700,000 in cash. The market value of XYZ Company's assets and liabilities on the acquisition date were $4,000,000 and $1,500,000, respectively.
Compute the cost of the goodwill purchased by ABC Company and journalize the entry to record the acquisition. How will the company account for this goodwill in future accounting periods?

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The Answer of ABC Company purchased XYZ Company for $3,700,000 in cash. The market value of XYZ Company's assets and liabilities on the acquisition date were $4,000,000 and $1,500,000, respectively.
Compute the cost of the goodwill purchased by ABC Company and journalize the entry to record the acquisition. How will the company account for this goodwill in future accounting periods?

ABC Company Purchased XYZ Company for $3,700,000 in Cash