Boggs Company is looking to purchase the Grafton Company for $150,000 cash. The fair value of their equipment is $35,600, the fair value of their inventory is $20,000, their accounts receivable fair value is $24,500, and they have an unrecorded patent of $15,000. All other book values equal fair value as of January 1, 2015.
Required:
1.) Compute the goodwill associated with the purchase of Grafton.
2.) Prepare the journal entry necessary at January 1, 2015 to record the purchase of Grafton.
3.) What if the purchase price was $69,000 would any goodwill be reported?