Cassie Purchases a Sole Proprietorship for $145,000

question 142

True/False

Cassie purchases a sole proprietorship for $145,000.The fair market value of the tangible assets is $110,000 and the agreed to value of goodwill is $10,000.Assuming there are no other intangible assets, Cassie's basis for the tangible assets is $132,917 ($110,000 + $22,917) and her basis for the goodwill is $12,083 ($10,000 + $2,083).

---

Definitions:

Check Register

A record of checks written, deposits made, and balances in a checking account, used for tracking financial transactions.

Vouchers Payable

A liability account that records the obligation of the company to pay off a debt, typically for goods or services received.

Vouchers Payable

Vouchers payable is an accounting term for records that detail the amounts owed by a business to its suppliers or vendors for goods or services received.

Liability Account

An accounting record of amounts owed to creditors, representing claims against the company’s assets.