Answer:
Intangibles = $1150,000 and Down Home Foods will record Goodwill equal to $575,000
Explanation:
A) Value on Intangible assets (Goodwill+Patent) = Total Assets - Tangible Assets
=$7,500,000 - $6,350,000 = $1150,000
Intangibles = $1150,000
B) Down Home Foods will record Goodwill in its books.
Value of Goodwill = Purchase Consideration - (Total Tangible Assets + Market Value of Patents)
= $7,500,000 - ($6,350,000+$575,000) = $575000
Down Home Foods will record Goodwill equal to $575,000
