An Acquisition Transaction Results in $90,000 of Goodwill

question 118

Essay

An acquisition transaction results in $90,000 of goodwill. Several years later a worksheet is being produced to consolidate the two companies. Describe in words at what amount goodwill will be reported at this date.

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Definitions:

Producer/Manufacturer

An entity or individual responsible for creating and producing goods or services to meet consumer demand.

Financial Shrewdness

The trait of having an astute understanding and smart management of financial resources.

Effectively

In a manner that produces the intended or desired result with efficiency.

Exchange Process

The act of giving one thing and receiving another, especially in terms of goods, services, or monetary value, between parties.