Lake Incorporated purchased all of the outstanding stock of Huron Company, paying $1,060,000 cash. Lake assumed all of the liabilities. Book values and fair values of acquired assets and liabilities were: Book Value Fair Value Current assets (net) $ 185,000 $ 185,000 Property, plant, equip. (net) 615,000 835,000 Liabilities 180,000 180,000 Lake would record goodwill of:

Question

Cordell Wilkerson

Business

Today, 10:09

Lake Incorporated purchased all of the outstanding stock of Huron Company, paying $1,060,000 cash. Lake assumed all of the liabilities. Book values and fair values of acquired assets and liabilities were: Book Value Fair Value Current assets (net) $ 185,000 $ 185,000 Property, plant, equip. (net) 615,000 835,000 Liabilities 180,000 180,000 Lake would record goodwill of:

+2

Answers (1)

Know the Answer?

Katie Sanders · Answer 1

It will record a goodwill for 220,000 dollars

Explanation:

acquisition of 100%: 1,060,000 cash

fair value of Huron Company

current assets 185, 000

PPE 835,000

Liabilities (180,000)

Net: 840,000

difference between fair value and acquisition cost:

1,060,000 - 840,000 = 220,000