Reference no: EM132544148
Green Company is considering acquiring the assets of Gold Company by assuming Gold's liabilities and by making cash payment. Gold Company has the following balance sheet on the date of acquisition:
Gold Company
Balance Sheet
December 31, 1994
Assets:
Liabilities and Equity:
Accounts Receivable........................100,000
Total Liabilities...........................200,000
Inventory..........................................100,000
Capital Stock (Br10 Par)..............100,000
Land.................................................100,000
Additional PIC............................200,000
Building (Net)...................................220,000
Retained Earnings......................300,000
Equipment (Net)...............................280,000
Total Asset........................................800,000
Total Liabilities and Equity..........800,000
Question 1: Appraisal indicates that the inventory is undervalued by Br 25,000; building is undervalued by Br 80,000; the equipment is overstated by Br 30,000; and the liability is overstated by Br 10,000. Determine the Goodwill that is recognized if Green Company pays Br 900,000 cash for the net assets of Gold Company.
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