compute the amount of goodwill that giant bakery should record on the date of the pu 558542

Computing Goodwill and Patents Elizabeth Pie Company has been in business for 50 years and has developed a large group of loyal restaurant customers. Giant Bakery Inc. has made an offer to buy Elizabeth Pie Company for $5,000,000. The book value of Elizabeth Pie”s recorded assets and liabilities on the date of the offer is $4,300,000 with a fair value of $4,500,000. Elizabeth Pie also (1) holds a patent for a pie crust fluting machine that the company invented (the patent with a fair value of $300,000 was never recorded by Elizabeth Pie because it was developed internally) and (2) estimates goodwill from loyal customers to be $310,000 (also never recorded by the company). Should Elizabeth Pie Company management accept Giant Bakery”s offer of $5,000,000? If so, compute the amount of goodwill that Giant Bakery should record on the date of the purchase.

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