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Calculate the amount of goodwill using the new harvest

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Reference no: EM132627627

New Harvest Bakery acquired all of the outstanding common stock of Red Rock Bakery for $68,000 in cash. The book values and the market values of Red Rock's assets and liabilities were as follows:

                                                            Book Value                       Fair Value

Current Assets                               $24,000                          $30,000

Property, plant, and equipment          $44,000                            $56,000

Other assets                                    $4,000                              $6,000

Current liabilities                                   $16,000                         $16,000

Long-term liabilities                                  $24,000                    $22,000

Problem 1: Calculate the amount of Goodwill using the New Harvest Bakery/Red Rock Bakery sales information above.

Group of answer choices

Option 1: $14,000

Option 2: $32,000

Option 3: $16,000

Option 4: $0 - No Goodwill recognized on the acquisition of Red Rock Bakery

 

Reference no: EM132627627

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