The document provides financial data to calculate goodwill, including net assets, the normal industry rate of return, and past earnings over 5 years. It shows how to determine average earnings, normal earnings based on the rate of return, average excess earnings, and then calculates goodwill by dividing the average excess earnings by the capitalization rate of 25%. The calculated goodwill based on this data is $400,000.
Original Description:
Original Title
Chapter 33 Intangible Assets Intro and Goodwill.xlsm - Cap of AVE EXCESS EARNINGS
The document provides financial data to calculate goodwill, including net assets, the normal industry rate of return, and past earnings over 5 years. It shows how to determine average earnings, normal earnings based on the rate of return, average excess earnings, and then calculates goodwill by dividing the average excess earnings by the capitalization rate of 25%. The calculated goodwill based on this data is $400,000.
The document provides financial data to calculate goodwill, including net assets, the normal industry rate of return, and past earnings over 5 years. It shows how to determine average earnings, normal earnings based on the rate of return, average excess earnings, and then calculates goodwill by dividing the average excess earnings by the capitalization rate of 25%. The calculated goodwill based on this data is $400,000.