Solution-How much of the purchase price will susie debit to

How much of the purchase price will susie debit to goodwill

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Question - Susie Corporation is buying all the assets and assuming all the liabilities of John's Barbeque Company. The following information is available for John's at the date of the purchase:

Accounts Receivable	250,000	Accounts payable	150,000
Inventory	100,000	Note Payable	100,000
Land	300,000	Common Stock	200,000
		Retained Earnings	400,000

The accounts receivable are worth $200,000, the inventory is worth $75,000 and the land is worth $500,000. The Accounts Payable are worth book value. Additionally, the Note Payable debt is payable interest only at 10% per year for the next 5 years and then the principal is due. The current interest rate for similar debt is 12%. Susie will pay $650,000 for John's. How much of the purchase price will Susie debit to goodwill?

A. $125,000.00.

B $129,804.45.

C. $117,790.45.

D. $120,196.45.

E. Some other number which is not here.

Reference no: EM132194037

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How much of the purchase price will susie debit to goodwill

Reference no: EM132194037

Reference no: EM132194037

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