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

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    Jaypee Verzo Salta
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    The document provides financial data to calculate goodwill, including net assets excluding goodwill of $7.5 million, an industry normal return of 12%, and average earnings over 5 years of $1 million. Goodwill is measured as the average earnings over 5 years of $1 million capitalized at 10%, resulting in net assets including goodwill of $10 million and calculated goodwill of $2.5 million.

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

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    The document provides financial data to calculate goodwill, including net assets excluding goodwill of $7.5 million, an industry normal return of 12%, and average earnings over 5 years of $1 million. Goodwill is measured as the average earnings over 5 years of $1 million capitalized at 10%, resulting in net assets including goodwill of $10 million and calculated goodwill of $2.5 million.

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

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

    Uploaded by

    Jaypee Verzo Salta
    The document provides financial data to calculate goodwill, including net assets excluding goodwill of $7.5 million, an industry normal return of 12%, and average earnings over 5 years of $1 million. Goodwill is measured as the average earnings over 5 years of $1 million capitalized at 10%, resulting in net assets including goodwill of $10 million and calculated goodwill of $2.5 million.

    Copyright:

    © All Rights Reserved
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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 earnings capitalized at 10%.

    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


    Divide by capitalization rate %
    Net assets including goodwill or purchase price xxx
    Net assets, excluding goodwill (xxx)
    Goodwill xxx

    Average earnings ( 1,000,000.00)


    Divide by capitalization rate 10%
    Net assets including goodwill or purchase price ( 10,000,000.00)
    Net assets, excluding goodwill ( (7,500,000.00)
    Goodwill ( 2,500,000.00)

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