Fresh Cut Corporation purchased all the outstanding common stock of Premium Meats for $10,100,000 in...
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Accounting
Fresh Cut Corporation purchased all the outstanding common stock of Premium Meats for $10,100,000 in cash. The book values and fair values of Premium Meats' assets and liabilities were:
| Book Value | Fair Value | |||
| Accounts Receivable | $ | 850,000 | $ | 650,000 |
| Equipment | 7,550,000 | 8,950,000 | ||
| Patent | 110,000 | 750,000 | ||
| Notes Payable | (800,000) | (800,000) | ||
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| Net assets | $ | 7,710,000 | $ | 9,550,000 |
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Required:
1. Calculate the amount Fresh Cut should report for goodwill. (Enter your answer in millions rounded to 2 decimal places (i.e., $5,500,000 should be entered as 5.50).)
2. Record Fresh Cut's acquisition of Premium Meats. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 2 decimal places (i.e., 5,550,000 should be entered as 5.55).)
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