On December 31, 2019, the Mega Corporation paid $104,000 for the purchase of Cafe Company....
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Finance
On December 31, 2019, the Mega Corporation paid $104,000 for the purchase of Cafe Company. On December 31, 2019, the Caf Company had the following book values for its assets and liabilities:
| Account | Book Value |
| Cash | $16,000 |
| Inventory | 31,400 |
| Equipment (net) | 85,700 |
| Notes payable | 46,000 |
| Common stock | 19,500 |
| Retained earnings | 67,600 |
An appraisal of the Caf Company determined that the inventory was undervalued by $4,900 and the equipment was overvalued by $6,500. Calculate the amount of goodwill that the Mega Corporation should record on December 31, 2019.
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