How much is the goodwill

Assignment Help Accounting Basics
Reference no: EM133122496

Question - On January 1, 2021, ABC Co. acquired all of the identifiable assets and assumed all of the liabilities of XYZ, Inc. by paying cash of 4,000,000. On this date, XYZ's identifiable assets and liabilities have fair values of 6,400,000 and 3,600,000, respectively. ABC agrees to pay an additional amount equal to 10% of the 20x1 year-end profit that exceeds 1,600,000. XYZ historically has reported profits of 1,200,000 to 1,600,000 each year. After assessing the expected level of profits for the year based on forecasts and plans, as well as industry trends, ABC estimated that the fair value of the contingent consideration is 40,000. How much is the goodwill (gain on bargain purchase)?

Reference no: EM133122496

Questions Cloud

Evaluate investment options available for organizations : Analyze the financial performance of a business by using basic quantitative approach and Evaluate investment options available for organizations
Company external environment and internal environment : Explain the relationship between a company's external environment and its internal environment
What two procedures that the auditor - must perform : After the auditor identified those business risks, what two procedures that the auditor - must perform before planning the substantive audit procedures
What is the firm dividend yield : The last dividend was $2.50. The long run growth rate for the company is a constant 3.50%. What is the firm's dividend yield?
How much is the goodwill : ABC estimated that the fair value of the contingent consideration is 40,000. How much is the goodwill (gain on bargain purchase)
Characterize the minimum variance portfolio : Consider a market with only two assets A and B. Both A and B have the same expected return of 10%, and the standard deviation of return on both assets is 0.2.
Analyze the pepsico guiding principles : Evaluate ways to establish ethics infrastructure in organizations and the role of ethics officers. Analyze organizational ethical policies and codes of conduct
Creating porter five forces chart : Define the Rivalry Among Existing Competitors. Define the bargaining power of supplies. Define the bargaining power of supplies.
Three key performance indicators : Identify at least three key performance indicators and discuss which ones have been used by current or past employers.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Determine the cost of the inventory that was destroyed

Othello is a small pharmaceuticals store in Sydney. Determine the cost of the inventory that was destroyed, for insurance purposes.

  What amount should Elkhart use for the transaction price

Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price

  What level of sales in units and in dollars would required

Toy Box Inc. would require a $5,000 profit per month. What level of sales in units and in dollars would be required to reach this target profit

  Problem 1nbspnbspon 1 january johnson set up

problem 1nbspnbspon 1 january johnson set up valleyviewplaygyms company tomanufacture and sell childrens outdoor

  Essay on the history of the double-entry bookkeeping system

ACC566 Acc Systems and Processes - Prepare an essay on the history of the double-entry bookkeeping system; how accounting records were prepared/maintained

  Discretionary and non-discretionary cost

What is the difference between discretionary and non-discretionary cost?

  Compute the new price of the bond

Question - The Vinny Cartier Company issued bonds at $1,000 per bond. Compute the new price of the bond

  What is the contract-based approach is accounting for lease

What is the contract-based approach is accounting for a lease? Explain how leases are classified into capital lease or operating lease under ASPE

  Thomas employment-related expenses

Thomas's employment-related expenses

  Determine the gain or loss on sale of the bonds

Interest is payable annually on January 1. On January 1, 2020, Hart sold half of the bonds at 101. Determine the Gain or loss on sale of the bonds

  Why does a company need unearned revenue account

Why does a company need unearned revenue account and why is it considered a liability? Also, how and when do we recognize

  Calculate the Richlieu profit margin

During 2018, Richlieu Corporation reported: Net sales $30,000,000 and Net income 1,500,000. Calculate the Richlieu's profit margin

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