Question

On March 31, 2021, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $17,800,000 in cash. The book values and fair values of Barney’s assets and liabilities were as follows:

Book Value Fair Value
Current assets $ 6,800,000 $ 8,300,000
Property, plant, and equipment 11,800,000 14,800,000
Other assets 1,080,000 1,580,000
Current liabilities 4,800,000 4,800,000
Long-term liabilities 6,800,000 6,300,000
Required:
1. Calculate the amount paid for goodwill.

Answer 1

Goodwill 4,120,000

Step-by-step explanation:

The company will post the list of acquired asset and liaiblities assumed when doing the purchase of barney at their fair value.

The difference between the purchase and the net assets of Barney will be considered goodwill.

Current Assets 8,300,000 debit

PPE 14,800,000 debit

Other Assets 1,580,000 debit

Goodwill 4,120,000 debit

Curent Liab 4,800,000 credit

Long term Liab 6,300,000 credit

Cash 17,800,000 credit

Answer 2

amount paid for good will = $ 4,220,000

Step-by-step explanation:

check the attachment below on how i solved it