Use the following information for questions.
Jeremiah Inc. is being targeted for acquisition by Argo Corporation. As an analyst for Argo, you are asked to determine the goodwill that, pending various assumptions, may be inherent in this potential transaction.
The available information relating to Jeremiah includes the following:
Current net aszete:

\quad

\quad

\quad

\quad

\quad

\quad

\quad

\quad

\quad

\quad

\quad

\quad

\$5.1

millien
Expected return on net assets for industry:

\quad

\quad

\quad

\quad

10 \%

Reported net income for the previous six consecutive years:

\begin{array}{llll}\text { YearAmount } &\text { Year }&\text { Amount } & \\2015 & \$ 710,000 & 2018 & \$ 745,000 \\2016 & \$ 680,000 & 2019 & \$ 815,000 \\2017 & \$ 980,000 & 2020 & \$ 835,000\end{array}

Net income for 2020 included a $ 200,000 gain from the sale of a discontinued operation.
-Assuming that excess earnings are expected to continue for 8 years, and ignoring the time value of money, estimated goodwill is
A) $ 2,273,000.
B) $ 2,006,667.
C) $ 1,854,333.
D) $ 1,531,733.

Which of the Following Legal Fees Should Be Capitalized

Short Answer

Correct Answer:VerifiedUnlock this answer nowGet Access to more Verified Answers free of chargeAccess For Free

Correct Answer:
Verified
Unlock this answer now
Get Access to more Verified Answers free of charge