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the balance sheet of cattleman's shows assets of $87,000 and liabilities of $15,400. the fair value of the assets is $89,700 and the fair value of its liabilities is $15,400. longhorn paid cattleman's $82,520 to acquire all of its assets and liabilities. longhorn should record goodwill on this purchase of:

Respuesta :

Longhorn should record goodwill on this purchase of $8,220.

It is given that the fair value of assets is $89,700 and the fair value of liabilities is $15,400

Fair value difference = Fair value of assets - Fair value of liabilities

Fair value difference =  $89,700 - $15,400

Fair value difference = $74,300

Hence, the fair value difference is $74,300

It is given that the acquisition price is  $82,520  and the calculated fair value difference is  $74,300. The calculation of goodwill is given below:

Goodwill = Acquisition price - Fair value difference

Goodwill = $82,520 - $74,300

Goodwill = $8,220

Hence, the goodwill is $8,220.

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