I need Part A of this exercise, a computation of Goodwill. Please provide work a

Question

I need Part A of this exercise, a computation of Goodwill. Please provide work and answers in spreadsheet format. Thank you very much! =)

Goodwill Computation, Acquisition of Intangibles, Amortization. Alto Devices acquires Mcdifast, a small start-up cor.pany, by paying $2,170,000 in cash on January 2. Following are the book values and fair values of Medifast on the date of acquisition. Medifast Cash Receivables Manufacturing equipment Patents (remaining life 10 years) Trademarks Payables Book Value $ 36,000 100,437 640,275 60,000 14,652 58,902 Fair Value $36,000 100,400 654,234 854,000 187450 58,902 Required x» a. What is the amount of goodwill acquired?

Explanation / Answer

Calculation of goodwill:

Goodwill in case of aquisition is calculated by deducting the amount of fair market value of net identifiable assets from the price paid for acquisition

So the solution is:

Goodwill = price paid for acquisition- fair market value of net identifiable assets

= 2170000- (36000+100400+654234+854000-187450-58902)= 2170000-2097182= $72818

So goodwill is $72818

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