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Calculate the amount of goodwill acquired prepare the

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Cafe Ole' Company acquired a fast-food restaurant for $1,500,000. The fair market values of the assets acquired were as follows. No liabilities were assumed.

Equipment $380,000

Land $200,000

Building $680,000

Franchise (5-year life) $120,000

Required:

a. Calculate the amount of goodwill acquired

b. Prepare the journal entry to record the amortization of the franchise fee at the end of year 1.

Reference no: EM13395444

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