Reference no: EM132703160
Yo-yo Ma Company assembled the following data relating to a certain entity in determining the amount to be paid for net assets and goodwill. Assets at fair value before goodwill 10,400,000 ; Liabilities 3,600,000 ; Net earnings 2016 800,000; 2017 920,000; 2018 1,200,000; 2019 1,000,000; 2020 1,080,000
Question 1. What is the goodwill if average earnings are capitalized at 10%?
Question 2. What is the amount of goodwill if a return of 8% is considered normal on net assets at fair value and excess earnings are capitalized at 15%?
Question 3. What is the goodwill if a return of 10% is considered normal on net assets at fair value and goodwill is measured at 5 years excess earnings?
Question 4. What is the goodwill if a return of 10% is considered normal on net assets at fair value and expected earnings are expected to continue for 10 years while goodwill is measured by the present value method using a 12% rate?
Question 5. What is the acquisition cost in reference to item number 2?
Question 6. In reference to number 4, what amount is credited to Cash?
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