Question - On October 1, 2015, Red Corporation acquired the assets of Blue Corporation. The assets acquired had appraised values on the date of acquisition as follows:
$25,000 Supplies
$125,000 Inventory
$150,000 Equipment
A. Assume Red paid $400,000 for the acquisition of Blue. Calculate the goodwill.
B. Calculate the amortization deduction of the goodwill for 2015.