Reference no: EM133116178
Question - Durango Company decided to acquire Bryson Technologies Inc. as of December 31, 2017. As of that date, Bryson's Balance Sheet was as follows:
Bryson Technologies Inc. Balance Sheet December 31, 2017
Assets Liabilities and Equities
Cash $420,000 Accounts payable $325,000
Receivables 475,000 Notes payable 1,450,000
Inventory 325,000
Plant assets (net) 2,965,000 Common stock 800,000
Patents 80,000 Retained earnings 1,690,000
Total assets $4,265,000 Total liabilities and equities $4,265,000
As part of due diligence, an appraisal of Bryson's assets and liabilities was performed. The appraisal indicated that the book value of the plant assets is $520,000 less than their fair value and the book value of the patents is $620,000 less than their fair value. For all other assets and liabilities, Durango and Bryson agreed that book value equaled fair value. Durango acquired Bryson Technologies Inc. for an acquisition price of $7,820,000, which was paid in cash to the owners of Bryson.
Required - Calculate the amount of goodwill (if any) to be recorded in the acquisition. Prepare Durango's journal entry to record the acquisition.