On January 1, 2019, Paul Company purchased Marino by acquiring all its outstanding shares for $300,000 cash. On that date, the fair value of the inventory was $10,000, and the fair value of the equipment was $230,000. In addition, the fair value of a previously unrecorded customer list was $25,000. For all other amounts, the book value of January 1, 2019, equaled fair value. Required: 1. Compute the goodwill associated with the purchase of Marino. 2. Prepare the journal entry necessary on January 1, 2019, to record the acquisition of Marino.

Goodwill = $35,000

Journal

J1

Investment in Marino $300,000 (debit)

Cash $300,000 (credit)

J2

inventory $10,000 (debit)

equipment $230,000 (debit)

Trade Receivable $25,000 (debit)

Goodwill $35,000 (debit)

Investment in Marino $300,000 (credit)

Explanation:

Goodwill is the excess of Purchase price over fair value of Assets and Liabilities transferred in a Business combination agreement.

Goodwill = Purchase price - Net Assets Transferred (fair value)

               = $300,000 - ($10,000+$230,000+$25,000)

               = $35,000

d, conspicuous consumption is when you try to increase your wealth or social status (and in the case he's trying to create the perception of wealth considering he can't really afford it)

answer; trojan horse;