Calculate goodwill and the acquisition differential

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ABC Inc. purchased all of the net assets of DEF Inc. for cash of $600,000. On the date of acquisition, DEF's assets included $900,000 of inventory, and land with a book value of $240,000. DEF also had $800,000 in liabilities on that date. DEF's book values were equal to their fair market values, with the exception of the company's land, which was estimated to have a fair market value which was $145,000 higher than its book value, and inventory, which was estimated to have a fair market value $10,000 higher than its book value.

Problem a) Calculate goodwill and the acquisition differential

Problem b) Give the journal entry to record ABC's acquisition of DEF?

Reference no: EM132772218

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