Question

Eco 215, 00-01.. Manage your team... Saved Help Save & Exit On June 1, Cline paid $911,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying amounts for Renn's assets and liabilities on Jun 1 follow: Cash Accounts receivable Capitalized software costs Goodwill Liabilities Net assets $ 161,000 194,000 345,000 168,000 (159,000) $ 709,000 On June 1, Renn's accounts receivable had a fair value of $143,000. Additionally, Renn's in-process research and development was estimated to have a fair value of $264,000. All other items were stated at their fair values. On Cline's June 1 consolidated balance sheet, how much is reported for goodwill? Multiple Choice $157000 $62.000 $345.000 < Prev < Prev 5 of 8 Next >

4th multiple choice) 106,000

Answer 1

Answer: $157,000

Calculations:

Cash	$161,000
Accounts receivable	$143,000
Capitalized software costs	$345,000
Goodwill	$168,000
Research and development	$264,000
Liabilities	($159,000)
Net assets	$922,000
Cash paid	($911,000)
Excess of net assets over cash paid	$11,000
In Consolidated Balance Sheet,
Goodwill	$168,000
Excess of net assets over cash paid	($11,000)
Goodwill shown in consolidated balance sheet	$157,000