On January 2, 2011, Pilates Inc

question 35

Essay

On January 2, 2011, Pilates Inc.paid $700,000 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.Then record the journal entry Pilates would record on their books to record the acquisition.

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Definitions:

Radioactive Decay

The process by which an unstable atomic nucleus loses energy by emitting radiation, leading to a change in the number and/or arrangement of its protons and neutrons.

Conduction

The direct transfer of heat or electricity through a substance when there is a temperature or electrical potential difference.

Thermal Energy

The internal energy present in a system due to the motion of its atoms or molecules, often perceived as heat.

Felsic Magma

Magma that is high in silica and light in color, typically associated with explosive volcanic eruptions.