Business, 13.03.2020 03:30 babygirl77733

Boggs Company is looking to purchase the Grafton Company below is their balance sheet at December 31, 2015. Boggs Company is looking to purchase the Grafton Company for $150,000 cash. The fair value of their equipment is $35,600, the fair value of their inventory is $20,000, their accounts receivable fair value is $24,500, and they have an unrecorded patent of $15,000. All other book values equal fair value as of January 1, 2015.

Cash $17,500 Accounts Payable $5,700
Accounts Receivable 35,000 Notes Payable 22,500
Inventory 15,700
Property, plant, and equipment 25,000 Retained Earning 65,000
$93,200 $93,200

Required:
1. Compute the goodwill associated with the purchase of Grafton.
2. Prepare the journal entry necessary at January 1, 2015 to record the purchase of Grafton.
3. What if the purchase price was $69,000 would any goodwill be reported?

Answers: 3

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Boggs Company is looking to purchase the Grafton Company below is their balance sheet at December 31...