Reference no: EM132531300
Acquisition of tangible and intangible assets.
Vasquez Manufacturing Company decided to expand further by purchasing Wasserman Company. The balance sheet of Wasserman Company as of December 31, 2011 was as follows:
Wasserman Company
Balance Sheet
December 31, 2011
Assets Liabilities and Equities
Cash $ 210,000 Accounts payable $ 375,000
Receivables 550,000 Common stock 800,000
Inventory 275,000 Retained earnings 885,000
Plant assets (net) 1,025,000
Total assets $2,060,000 Total liabilities and equities $2,060,000
- An appraisal, agreed to by the parties, indicated that the fair market value of the inventory was $350,000 and that the fair market value of the plant assets was $1,225,000. The fair market value of the receivables is equal to the amount reported on the balance sheet. The agreed purchase price was $2,075,000, and this amount was paid in cash to the previous owners of Wasserman Company.
Instructions
Question 1: Determine the amount of goodwill (if any) implied in the purchase price of $2,075,000. Show calculations.
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