Question

What amount of goodwill did Hershey recognize in the combination? Prepare a schedule that computes the goodwill recognized in the acquisition as the difference between the consideration transferred for Amplify and the fair values of the individually identified assets and liabilities acquired.

Answer 1

Schedule Showing computation of Goodwill in acquisition
Consideration Transferred	-
Total Assets	-
Less;- Total Liabilities	-
Net Identifiable Assets	-
Goodwill = (Purchase Consideration - Net Identifiable Assets)	-

it can be easily understood by taking some Imaginary figures for Amplify

Lets Suppose fair Values of Individual Identified Assets and Liabilities aquired be,

Cash = $2000

Inventory = $13500

Net fixed Assets = $140000

Accounts Payable = $45500

Unearned Income = $1000

Consideration Transferred for Amplify (Purchase Consideration) = $118500

Schedule Showing computation of Goodwill in acquisition
Consideration Transferred (A)	$ 118,500.00
Cash	$   2,000.00
Inventory	13500.00
Net fixed Assets	140000.00
Total Assets (X)	155500.00
Less;- Total Liabilities
Accounts Payable	$ 45,500.00
Unearned Income	1000.00
Total Liabilities (Y)	$ 46,500.00
Net Identifiable Assets (X-Y)	$ 109,000.00
Goodwill {A- (X-Y)}	$     9,500.00