Compute the goodwill associated with the purchase of grafton

Assignment Help Financial Management
Reference no: EM132316361

Question

Boggs company is looking to purchase the Grafton Company below is their balance sheet at December 31, 2015.

Boggs Company is looking to purchase the Grafton Company for $150,000 cash. The fair value of their equipment is $35,600, the fair value of their inventory is $20,000, their accounts receivable fair value is $24,500, and they have an unrecorded patent of $15,000. All other book values equal fair value as of January 1, 2015.

 

Cash                                               $17,500                  accounts Payable             $5,700

Accounts Receivable                          35,000                    Notes Payable                 22,500

Inventory                                         15,700

Property, plant, and equipment             25,000                   Retained Earnings             65,000

                                                    -----------------                                        ---------------

                                                     $93,200                                                       $93,200

                                                   -------------------------                            ------------------

Required:

1.) Compute the goodwill associated with the purchase of Grafton.

2.) Prepare the journal entry necessary at January 1, 2015 to record the purchase of Grafton.

3.) What if the purchase price was $69,000 would any goodwill be reported?

Reference no: EM132316361

Questions Cloud

Facilities continue to grow in the united states : Skilled nursing facilities continue to grow in the United States. It is currently funded primarily by Medicare, Medicaid, and private pay
Define how it and the business can work collaboratively : Overall, how effective is the partnership between IT and the business at Hefty Hardware? Identify the shortcomings of both IT and the business.
What is the role of epmo in managing portfolios : What is the role of EPMO in managing Portfolios, Programs and Projects?
Discuss two of the performance indeces : Discuss two of the performance Indeces is there a major difference in the two?
Compute the goodwill associated with the purchase of grafton : Compute the goodwill associated with the purchase of Grafton. What if the purchase price was $69,000 would any goodwill be reported?
Define what constraints did you experience : Describe an IT or similar business project you have done, are currently doing or would like to do. This should be original and not copied from the internet.
What is earned value analysis : What is Earned Value Analysis? and what is the purpose of Variance analysis?
What is the definition of success in a project : What is the definition of Success in a Project and differences between each one?
Are we winning the fight against malware : Chapter 5 covered malware concepts and how Microsoft Windows protects against malware. Why is it important to protect organizational assets against malware?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd