CARE COMPANY COOL COMPANY

Accounts receivable 2,000,000 Carrying amount of net assets

Inventory 500,000 Undervaluation of property, plant and equipment
Equipment 500,000 Overvaluation of other assets
Short-term receivable -2,000,000 Overvaluation of long-term debt
Net assets at fair value 1,000,000 Fair value of net assets

Acquisition cost 5,000,000 Acquisition cost

Net assets at fair value -1,000,000 Fair value of net assets acquired
Goodwill 4,000,000 Goodwill

GOLA COMPANY DIG Inc.

Acquisition cost 714,000 2,000,000/20,000,000 * 5,000,000
Amortization for 2017, 2018 and 2019 (47,600 x 3) -142,800 2,000,000 - 500,000 = 1,500,000
Carrying amount - 1/1/2020 571,200
Amortization for 2020 (571,200 / 7) -81,600 BK Inc.
Carrying amount - 12/31/2020 489,600 20,000,000/10 * 9 = 18,000,000

WISE INC.
10,000,000/5 *3 = 6,000,000

6,000,000 - 1,000,000 = 5,000,000

5,000,000 - 500,000 = 4,500,000

4,500,000 - 5,000,000 = (500,000)
 3,200,000
ant and equipment 750,000
-500,000
200,000
3,650,000

4,000,000
-3,650,000
350,000

/20,000,000 * 5,000,000 = 500,000

- 500,000 = 1,500,000

0/10 * 9 = 18,000,000