an appraiser assessed the fair market value of the tangible assets at 270 000 at the 650338

Computing and recording goodwill

Ben Sands purchased the business Regional Supply Co. for $285,000 cash and assumed all liabilities at the date of purchase. Regional’s books showed assets of $280,000, liabilities of $40,000, and equity of $240,000. An appraiser assessed the fair market value of the tangible assets at $270,000 at the date of purchase. Sands’s financial condition just prior to the purchase is shown in the following statements model.

Required

a. Compute the amount of goodwill purchased.

b. Record the purchase in a financial statements model like the preceding one.