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  • Chapter 33 Intangible Assets Intro and Goodwill - XLSM - Cap of AVE EXCESS EARNINGS

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    Jaypee Verzo Salta
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    The document provides financial data to calculate goodwill, including net assets, the normal industry rate of return, and past earnings over 5 years. It shows how to determine average earnings, normal earnings based on the rate of return, average excess earnings, and then calculates goodwill by dividing the average excess earnings by the capitalization rate of 25%. The calculated goodwill based on this data is $400,000.

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    Chapter 33 Intangible Assets Intro and Goodwill.xlsm - Cap of AVE EXCESS EARNINGS

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    The document provides financial data to calculate goodwill, including net assets, the normal industry rate of return, and past earnings over 5 years. It shows how to determine average earnings, normal earnings based on the rate of return, average excess earnings, and then calculates goodwill by dividing the average excess earnings by the capitalization rate of 25%. The calculated goodwill based on this data is $400,000.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    5 views1 page

    Chapter 33 Intangible Assets Intro and Goodwill - XLSM - Cap of AVE EXCESS EARNINGS

    Uploaded by

    Jaypee Verzo Salta
    The document provides financial data to calculate goodwill, including net assets, the normal industry rate of return, and past earnings over 5 years. It shows how to determine average earnings, normal earnings based on the rate of return, average excess earnings, and then calculates goodwill by dividing the average excess earnings by the capitalization rate of 25%. The calculated goodwill based on this data is $400,000.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    The following data are available in relation to the computation of goodwill:

    Net assets, excluding goodwill ( 7,500,000.00)


    Normal rate of return in the industry 12%

    The goodwill is measured at the average excess earnings capitalized at 25%.

    Past earnings for 5 years preceding the sale:


    2017 ( 950,000.00)
    2018 ( 975,000.00)
    2019 ( 950,000.00)
    2020 ( 1,075,000.00)
    2021 ( 1,050,000.00)

    Average earnings xxx


    Normal earnings (xxx)
    Average excess earnings xxx
    Divide by capitalization rate %
    Goodwill xxx

    Average earnings ( 1,000,000.00)


    Normal earnings ( (900,000.00)
    Average excess earnings ( 100,000.00)
    Divide by capitalization rate 25%
    Goodwill ( 400,000.00)

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