FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Maxwell paid cash of $2,700,000 for this investment which gave them significant influence over Magic. The following book values and fair values for Magic on that date are available:
Book Value Fair Value
Cash and Receivables $ 110,000 $ 110,000
Equipment 5,000,000 5,700,000
Patents 100,000 4,000,000
Trademark 150,000 2,000,000
Liabilities (185,000) (185,000)
The remaining useful life for these assets are:
Equipment 7 years Patents 3 years Trademark indefinite
Any unidentified excess cost is attributed to
What amount of goodwill is attributable to this purchase? What amount should Maxwell report for its equity in Magic’s earnings on its income statement for 2020?
What amount should Maxwell report for its investment in Magic on its
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