The lifo inventory method has been used the fifo inventory

Assignment Help Accounting Basics

Reference no: EM13571035

Valman Company is considering purchasing EKC Company. EKC's balance sheet at December 31, 2013, is as follows:

Cash	$56,000	Current liabilities	$64,000
Accounts receivable	74,000	Bonds payable	214,000
Inventory	100,000	Common stock	250,000
Property, plant, and equipment (net)	560,000	Retained earnings	262,000
	$790,000		$790,000

At December 31, 2013, Valman discovered the following about EKC:

No allowance for uncollectible accounts has been established. An allowance of $4,000 is considered appropriate.
The LIFO inventory method has been used. The FIFO inventory method would be used if EKC were purchased by Valman. The FIFO inventory valuation of the December 31, 2013, ending inventory would be $166,000.
The fair value of the property, plant, and equipment (net) is $680,000.
The company has an unrecorded patent that is worth $100,000.
The book values of the current liabilities and bonds payable are the same as their market values.

Required:

1. Compute the value of the goodwill if Valman pays $1,244,000 for EKC.

Reference no: EM13571035

Questions Cloud

Rush corporation plans to acquire production equipment for : rush corporation plans to acquire production equipment for 640000 that will be depreciated for tax purposes as follows

Explain the relationship between cost allocation and : explain the relationship between cost allocation and customer profitability. why is determining customer profitability

Tom was transferred from boston to baltimore he sold his : tom was transferred from boston to baltimore. he sold his boston residence adjusted basis of 200000 for 280000 and

Hand out wholesalers has sold inventory to jones hardware : hand out wholesalers has sold inventory to jones hardware under the agreement of fob shipping point. cost of shipping

The lifo inventory method has been used the fifo inventory : valman company is considering purchasing ekc company. ekcs balance sheet at december 31 2013 is as

Realizing that providing for a comfortable retirement is up : realizing that providing for a comfortable retirement is up to them ted and lillie commit to make regular contributions

What is the amount of the cost of beginning work in process : clopack company manufactures one product that goes through one processing department called mixing. all raw materials

Vaughn company which uses a periodic inventoy system had a : 1. given the following information calculate the amount of cash finallly remitted by the customer on feb 212. vaughn

Your paper should explain and develop the aspects of a : your paper should explain and develop the aspects of a particular idea concept or argument covered in the readings i.e.

User Account

All Pages