On March 31,2012,the New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $68,000 in cash.The book values and market values of Red Rock's assets and liabilities were as follows:
Calculate the amount paid for goodwill.
$\begin{array}{lrr}&\text { Book Value }&\text { Fair Value }\
\text { Current assets } & \$ 24,000 & \$ 30,000 \
\text { Property, plant, and equipment } & 44,000 & 56,000 \
\text { Other assets } & 4,000 & 6,000 \
\text { Current liabilities } & 16,000 & 16,000 \
\text { Long-term liabilities } & 24,000 & 22,000
\end{array}$

Question

On March 31,2012,the New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $68,000 in cash.The book values and market values of Red Rock's assets and liabilities were as follows:
Calculate the amount paid for goodwill.
 $\begin{array}{lrr}&\text { Book Value }&\text { Fair Value }\
\text { Current assets } & \$ 24,000 & \$ 30,000 \
\text { Property, plant, and equipment } & 44,000 & 56,000 \
\text { Other assets } & 4,000 & 6,000 \
\text { Current liabilities } & 16,000 & 16,000 \
\text { Long-term liabilities } & 24,000 & 22,000
\end{array}$

Quizplus · Accepted Answer

The Answer of On March 31,2012,the New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $68,000 in cash.The book values and market values of Red Rock's assets and liabilities were as follows:
Calculate the amount paid for goodwill.
 $\begin{array}{lrr}&\text { Book Value }&\text { Fair Value }\
\text { Current assets } & \$ 24,000 & \$ 30,000 \
\text { Property, plant, and equipment } & 44,000 & 56,000 \
\text { Other assets } & 4,000 & 6,000 \
\text { Current liabilities } & 16,000 & 16,000 \
\text { Long-term liabilities } & 24,000 & 22,000
\end{array}$

On March 31,2012,the New Harvest Bakery Acquired All the Outstanding