On January 2,2011,Pilates Inc.paid $900,000 for all of the outstanding common stock of Spinning Company,and dissolved Spinning Company.The carrying values for Spinning Company's assets and liabilities are recorded below.
On January 2,2011,Spinning anticipated collecting $185,000 of the recorded Accounts Receivable.Pilates entered into the acquisition because Spinning had Copyrights that Pilates wished to own,and also unrecorded patents with a fair value of $100,000.
Required:
Calculate the amount of goodwill that will be recorded on Pilate's balance sheet as of the date of acquisition.
Definitions:
Customer Cost Analysis
The process of analyzing the costs related to acquiring and serving customers to determine their profitability.
Capacity Analysis
The study of a system's ability to produce output within specific time periods under given constraints.
Tech Support Department
A division within a company that provides assistance and problem-solving services for customers experiencing issues with technical products or services.
Time-Driven Activity-Based Costing
A costing method that assigns costs to products or services based on the amount of resources they use, measured in time, enhancing cost accuracy and managerial decision-making.
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