Ask Question
18 July, 10:04

On September 1, 2020, Winans Corporation acquired Aumont Enterprises for a cash payment of $700,000. At the time of purchase, Aumont's balance sheet showed assets of $620,000, liabilities of $200,000, and owners' equity of $420,000. The fair value of Aumont's assets is estimated to be $800,000.

+3
Answers (1)
  1. 18 July, 10:45
    0
    Goodwill = $100,000

    Explanation:

    As Winans Corporation acquired Aumont for a cash payment, the following table shows the goodwill acquired by Winans-

    Acquisition price (Purchase) $700,000

    Less: Fair value of net assets

    Market price of assets $ 800,000

    Market price of liabilities $ (200,000) (600,000)

    Goodwill $100,000

    Note: Assets need to be valued as a market price. Therefore, $620,000 amounts of assets will not be shown during the deduction.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “On September 1, 2020, Winans Corporation acquired Aumont Enterprises for a cash payment of $700,000. At the time of purchase, Aumont's ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers