Question 2. Maplewood Corporation purchased the net assets of West Corporation on January 2, 2016 for $580,000. West's balance sheet on January 1, 2016 was as follows: Accounts receivable-net $ 180,000 Current liabilities $ 70,000 Inventory 360,000 Long term debt 160,000 Land 40,000 Common stock ($1 par) 20,000 60,000 Paid-in capital 430,000 40,000 80,000 Retained earnings $720,000 Total liab. & equity $ 720,000 Building-net Equipment-net Total assets Fair values agree with book values except for inventory, land, and equipment, which have fair values of $400,000, $50,000 and $70,000, respectively. West has patent rights valued at $20,000. Required: A. Prepare Maplewood's general journal entry for the cash purchase of West's net assets. B. Assume Maplewood Corporation purchased the net assets of West Corporation for $500,000 rather than $580,000, prepare the general journal entry.

A-5

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Linden Corporations is negotiating for the purchase of Hill Company.  The following is an abbreviated balance sheet of Hill.  Hill Company Balance Sheet As of December 31, 2025    Assets                                                                                    Liabilities and Stockholders’ Equity                                                                Cash                                                                 $100,000          Accounts payable                        $150,000 Land                                                                   230,000          Notes payable (long-term)          250,000 Equipment, net                                               200,000          Common stock                               140,000                                                                                                    Trademark                                                          40,000          Retained earnings                           30,000…

Abe Manufacturing Corp. decided to expand further by purchasing the net assets of ERB Manufacturing Corp. ERB's statement of financial position at December 31, 2023 follows. Assets Receivables Inventory Plant assets (net) Total assets ERB MANUFACTURING CORP. Statement of Financial Position December 31, 2023 Cash 450,000 275,000 1,025,000 $1,960,000 $ 210,000 Liabilities and Equities Accounts payable $ 325,000 Common shares 800,000 Retained earnings 835,000 Total liabilities and equities $1,960,000 An appraisal, agreed to by both parties, indicated that the fair value of the inventory was $320,000 and the fair value of the plant assets was $1,225,000. The fair value of the receivables and payables is equal to the amount reported on the balance sheet. The agreed purchase price was $3 million, and this amount was paid in cash to the owners of ERB. Instructions Calculate the amount of goodwill (if any) implied in the purchase price of $3 million. Show calculations.