Reference no: EM131817508
Accounting for intangibles
1. Goodwill $330,000
Midland Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Midland purchased goodwill as part of the acquisition of Shipley Wireless Company, which had the following figures:
Book value of assets $ 750,000
Market value of asset 1,000,000
Market value of liabilities 530,000
Requirements
1. Journalize the entry to record Midland's purchase of Shipley Wireless for $320,000 cash plus a $480,000 note payable.
2. What special asset does Midland's acquisition of Shipley Wireless identify? How should Midland Telecom account for this asset after acquiring Shipley Wireless?
Explain in detail.