Corporation A purchased the net assets of Corporation B for LO 2 $80,000. On the date...
Corporation A purchased the net assets of Corporation B for LO 2 $80,000. On the date of A’s purchase, Corporation B had no long-term investments in marketable securities and $10,000 (book and fair value) of liabilities. The fair values of Corpo- ration B’s assets, when acquired, were Current assets Noncurrent assets Total $ 40,000 60,000 $ 100,000 Under FASB Statement No. 141R and No.160 [Topics 805 and 810], how should the $10,000 difference between the fair value of the net assets acquired ($90,000) and the value implied by the purchase price ($80,000) be accounted for by Corporation A? (a) The $10,000 difference should be credited to retained earnings. (b) The noncurrent assets should be recorded at $50,000. (c) The current assets should be recorded at $36,000, and the noncurrent assets should be recorded at $54,000. (d) A current gain of $10,000 should be recognized.
Homework Answers
Answer
(d) A current gain of $10,000 should be recognized.
Value of net assets acquired = $90,000
Less Purchase Price Paid = $80,000
Gain = $10,000
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Corporation A purchased the net assets of Corporation B for LO 2
$80,000. On the date...
During 2021, Blossom Company purchased the net assets of Crane Corporation for $2226400. On the date...
During 2021, Blossom Company purchased the net assets of Crane Corporation for $2226400. On the date of the transaction, Crane had $607200 of liabilities. The fair value of Crane's assets when acquired were as follows: Current assets $1092960 Noncurrent assets 2550240 $3643200 How should the $809600 difference between the fair value of the net assets acquired ($3036000) and the cost ($2226400) be accounted for by Blossom? The current assets should be recorded at $1092960 and the noncurrent assets should be...
QUESTION 5 Wilder Company purchased the net assets of Stocks Company for $225,000. On the date...
QUESTION 5 Wilder Company purchased the net assets of Stocks Company for $225,000. On the date of Wilder's purchase, Stocks Company had $30,000 (book and fair value) of liabilities The fair values of Stocks Company's assets, when acquired, were Current assets $ 120,000 Noncurrent assets 180.000 Total $300,000 How should the 545,000 difference between the fair value of the net assets acquired (5270,000) and the consideration paid ($225,000) be accounted for by Wilder Company? A. The $45.000 difference should be...
Exercise 5-3 Pace Company purchased 20,000 of the 25,000 shares of Saddler Corporation for $522,100. On...
Exercise 5-3 Pace Company purchased 20,000 of the 25,000 shares of Saddler Corporation for $522,100. On January 3, 2014, the acquisition date, Saddler Corporation's capital stock and retained earnings account balances were $494,200 and $98,500, respectively. The following values were determined for Saddler Corporation on the date of purchase: Inventory Other current assets Marketable securities Plant and equipment Book Value $49,700 201,500 100,800 295,400 Fair Value $69,000 201,500 126,500 326,700 (b) Prepare a Computation and Allocation Schedule for the difference...
E3.3 Eliminating Entries, Revaluation of Reported Net Assets Petrel Corporation acquires all of the stock of Samson...
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Problem 3 Pennington Corporation purchased 80% of the votine common stock of Stafford Corporation for $3,200,000...
Problem 3 Pennington Corporation purchased 80% of the votine common stock of Stafford Corporation for $3,200,000 cash on January 1, 2016. On this date the book values and fair values of Stafford Corporation's assets and liabilities were as follows: Book Value Fair Value Cash $ 70,000 $ 70,000 Receivables 240,000 240,000 Inventories 600,000 700.000 Other Current Assets 340.000 405,000 Land 600,000 720,000 Buildings -net 1,050,000 1.920,000 Equipment - net 850,000 750,000 $3.750,000 $4.805.000 $250,000 670.000 Accounts Payable Other Liabilities Capital...
Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% interest in Shaw Company for...
Exercise 5-1
On January 1, 2013, Pam Company purchased an 85% interest in Shaw
Company for $541,800. On this date, Shaw Company had common stock
of $398,100 and retained earnings of $143,700.
An examination of Shaw Company’s assets and liabilities revealed
that their book value was equal to their fair value except for
marketable securities and equipment:
Book Value
Fair Value
Marketable securities
$19,800
$44,600
Equipment (net)
120,200
140,000
(a)
Prepare a Computation and Allocation Schedule for the difference
between...
Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% Interest In Shaw Company for...
Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% Interest In Shaw Company for $542,200. On this date, Shaw Company had common stock of $403,400 and retalned earnings of $138,800. An examination of Shaw Company's assets and liabilities revealed that their book value was equal to their fair value except for marketable securities and equipment: Book Value Falr Value Marketable securities $20,200 $45,100 Equipment (net) 119,900 140,000 v (a) 2 Your answer is partially correct. Try again. Prepare...
On January 1, 20X1, Porta Corporation purchased Swick Company’s net assets and assigned goodwill of $80,000...
On January 1, 20X1, Porta Corporation purchased Swick Company’s net assets and assigned goodwill of $80,000 to Reporting Division K. The following assets and liabilities are assigned to Reporting Division K on the acquisition date: Carrying Amount Fair Value Cash $ 14,000 $ 14,000 Inventory 56,000 71,000 Equipment 170,000 190,000 Goodwill 80,000 Accounts Payable 30,000 30,000 Required: On December 31, 20X3, Porta must test goodwill for impairment. Determine the amount of goodwill to be reported for Division K and the...
5-1 and 5-2 CISE 5-1 interest in Shaw Company for $540,000 Allocation of Cost LO 1...
5-1 and 5-2
CISE 5-1 interest in Shaw Company for $540,000 Allocation of Cost LO 1 LO3 On January 1, 2018, Pam Company purchased an 85% interest in Shaw Company On this date, Shaw Company had common stock of $400,000 and retained carnings of An examination of Shaw Company's assets and liabilities revealed that the equal to their fair value except for marketable securities and equipment: assets and liabilities revealed that their book value was Book Value Fair Value Marketable...
Answer question (b), do not copy others answer. (b) Determine the amount of goodwill that prover...
Answer question (b), do not copy others answer.
(b) Determine the amount of goodwill that prover should report
in its current financial statement.
P1-33 Goodwill Assigned to Multiple Reporting Units The fair values of assets and liabilities held by three reporting units and other information related to the reporting units owned by Prover Company are as follows: Reporting Unit Cash & Receivables Inventory Land Buildings Equipment Accounts Payable Fair Value of Reporting Unit Carrying Value of Investment Goodwill Included in...
During 2021, Blossom Company purchased the net assets of Crane Corporation for $2226400. On the date of the transaction, Crane had $607200 of liabilities. The fair value of Crane's assets when acquired were as follows: Current assets $1092960 Noncurrent assets 2550240 $3643200 How should the $809600 difference between the fair value of the net assets acquired ($3036000) and the cost ($2226400) be accounted for by Blossom? The current assets should be recorded at $1092960 and the noncurrent assets should be...
QUESTION 5 Wilder Company purchased the net assets of Stocks Company for $225,000. On the date of Wilder's purchase, Stocks Company had $30,000 (book and fair value) of liabilities The fair values of Stocks Company's assets, when acquired, were Current assets $ 120,000 Noncurrent assets 180.000 Total $300,000 How should the 545,000 difference between the fair value of the net assets acquired (5270,000) and the consideration paid ($225,000) be accounted for by Wilder Company? A. The $45.000 difference should be...
Exercise 5-3 Pace Company purchased 20,000 of the 25,000 shares of Saddler Corporation for $522,100. On January 3, 2014, the acquisition date, Saddler Corporation's capital stock and retained earnings account balances were $494,200 and $98,500, respectively. The following values were determined for Saddler Corporation on the date of purchase: Inventory Other current assets Marketable securities Plant and equipment Book Value $49,700 201,500 100,800 295,400 Fair Value $69,000 201,500 126,500 326,700 (b) Prepare a Computation and Allocation Schedule for the difference...
E3.3 Eliminating Entries, Revaluation of Reported Net Assets Petrel Corporation acquires all of the stock of Samson Company for $30 million in cash. Samson's balance sheet accounts at the date of acquisition are listed below. Date-of-acquisition fair values for Samson's assets and liabilities are also displayed. Samson has previously unreported developed technology valued at $6 million, meeting the criteria for capitalization per ASC Topic 805. (in thousands) Book Value Dr (Cr) Fair Value Dr (Cr) Cash........ Accounts receivable........................ Inventories ..........
Problem 3 Pennington Corporation purchased 80% of the votine common stock of Stafford Corporation for $3,200,000 cash on January 1, 2016. On this date the book values and fair values of Stafford Corporation's assets and liabilities were as follows: Book Value Fair Value Cash $ 70,000 $ 70,000 Receivables 240,000 240,000 Inventories 600,000 700.000 Other Current Assets 340.000 405,000 Land 600,000 720,000 Buildings -net 1,050,000 1.920,000 Equipment - net 850,000 750,000 $3.750,000 $4.805.000 $250,000 670.000 Accounts Payable Other Liabilities Capital...
Exercise 5-1
On January 1, 2013, Pam Company purchased an 85% interest in Shaw
Company for $541,800. On this date, Shaw Company had common stock
of $398,100 and retained earnings of $143,700.
An examination of Shaw Company’s assets and liabilities revealed
that their book value was equal to their fair value except for
marketable securities and equipment:
Book Value
Fair Value
Marketable securities
$19,800
$44,600
Equipment (net)
120,200
140,000
(a)
Prepare a Computation and Allocation Schedule for the difference
between...
Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% Interest In Shaw Company for $542,200. On this date, Shaw Company had common stock of $403,400 and retalned earnings of $138,800. An examination of Shaw Company's assets and liabilities revealed that their book value was equal to their fair value except for marketable securities and equipment: Book Value Falr Value Marketable securities $20,200 $45,100 Equipment (net) 119,900 140,000 v (a) 2 Your answer is partially correct. Try again. Prepare...
5-1 and 5-2
CISE 5-1 interest in Shaw Company for $540,000 Allocation of Cost LO 1 LO3 On January 1, 2018, Pam Company purchased an 85% interest in Shaw Company On this date, Shaw Company had common stock of $400,000 and retained carnings of An examination of Shaw Company's assets and liabilities revealed that the equal to their fair value except for marketable securities and equipment: assets and liabilities revealed that their book value was Book Value Fair Value Marketable...
Answer question (b), do not copy others answer.
(b) Determine the amount of goodwill that prover should report
in its current financial statement.
P1-33 Goodwill Assigned to Multiple Reporting Units The fair values of assets and liabilities held by three reporting units and other information related to the reporting units owned by Prover Company are as follows: Reporting Unit Cash & Receivables Inventory Land Buildings Equipment Accounts Payable Fair Value of Reporting Unit Carrying Value of Investment Goodwill Included in...
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