1 on June 1, 2017, Fox Company Purchased Wolf Corporation

question 75

Essay

1. On June 1, 2017, Fox Company purchased Wolf Corporation for $26,000,000 cash. At the time of the purchase, the market value of Wolf Corporation's assets and liabilities were $30,000,000 and $5,000,000, respectively. The book value of Wolf Corporation's assets and liabilities were $10,000,000 and $6,000,000, respectively. Record the journal entry for the acquisition by Fox Company.
2. By December 31, 2017, Fox Company discovered that the goodwill associated with Wolf Corporation is impaired and is worthless. Wolf Corporation is on the brink of bankruptcy. Record the journal entry needed by Fox Company.

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Definitions:

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