FIN 370 Course Great Wisdom / tutorialrank.com FIN 370 Course Great Wisdom / tutorialrank.com | Page 29
Acquisition of debt
Payment to a supplier
Repurchase of common stock
Nadine ’ s Home Fashions has $ 2.12 million in net working capital . The firm has fixed assets with a book value of $ 31.64 million and a market value of $ 33.9 million . The firm has no long-term debt . The Home Centre is buying Nadine ’ s for $ 37.5 million in cash . The acquisition will be recorded using the purchase accounting method . What is the amount of goodwill that The Home Centre will record on its balance sheet as a result of this acquisition ?
$ 5.86 million
$ 3.34 million
$ 4.14 million
$ 1.48 million
Acquisition of debt
Payment to a supplier
Repurchase of common stock
Nadine ’ s Home Fashions has $ 2.12 million in net working capital . The firm has fixed assets with a book value of $ 31.64 million and a market value of $ 33.9 million . The firm has no long-term debt . The Home Centre is buying Nadine ’ s for $ 37.5 million in cash . The acquisition will be recorded using the purchase accounting method . What is the amount of goodwill that The Home Centre will record on its balance sheet as a result of this acquisition ?