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  • Chapter 33 Intangible Assets Intro and Goodwill - XLSM - Purchase 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, normal industry return, and past earnings over 5 years. Average excess earnings over 5 years were $100,000, and multiplying this by 5 years gives a calculated goodwill value of $500,000.

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

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    The document provides financial data to calculate goodwill, including net assets, normal industry return, and past earnings over 5 years. Average excess earnings over 5 years were $100,000, and multiplying this by 5 years gives a calculated goodwill value of $500,000.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    12 views1 page

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

    Uploaded by

    Jaypee Verzo Salta
    The document provides financial data to calculate goodwill, including net assets, normal industry return, and past earnings over 5 years. Average excess earnings over 5 years were $100,000, and multiplying this by 5 years gives a calculated goodwill value of $500,000.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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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 average excess earnings for 5 years.

    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
    Multiply by years of excess earnings x
    Goodwill xxx

    Average earnings ( 1,000,000.00)


    Normal earnings ( (900,000.00)
    Average excess earnings ( 100,000.00)
    Multiply by years of excess earnings ( 5)
    Goodwill ( 500,000.00)

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