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How much goodwill should Red Design record

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Problem - Red Design purchased 100% of Blue Design's outstanding stock for $200,000 cash. Red Design assumed 100% of Blue Design's liabilities. Below are the book values and fair values of the acquired assets and liabilities:

 

Book Value

Fair Value

Current Assets - Net

$100,000

$80,000

PPE - Net

$430,000

$625,000

Liabilities

$67,000

$82,000

Required - How much goodwill should Red Design record? Please show all work.

Reference no: EM132820279

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