1. The Judi Company purchased another entity for P8,000,000 cash. A schedule of the fair value of the acquired entity's assets and liabilities is prepared as of the purchase date. Cash Accounts Receivable Inventory Property, plant and equipment 6,550,000 Accounts payable P 100,000 850,000 1,300,000 4,300,000 950,000

1. The Judi Company purchased another entity for P8,000,000 cash. A schedule of the fair value of the acquired entity's assets and liabilities is prepared as of the purchase date. Cash Accounts Receivable Inventory Property, plant and equipment 6,550,000 Accounts payable P 100,000 850,000 1,300,000 4,300,000 950,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $30,000,000 in cash. The book values and fair values of Iceberg's assets and liabilities were as follows: Current assets Property, plant, and equipment Other assets Current liabilities Long-term liabilities Required: 1. Calculate the amount paid for goodwill. 2. Determine the financial statement effects of the acquisition. Required 1 Required 2 Complete this question by entering your answers in the tabs below. Book Value $ 11,400,000 20,200,000 3,400,000 7,800,000 13,200,000 Assets Determine the financial statement effects of the acquisition. Note: Amounts to be deducted should be indicated with a minus sign. Enter your answer in millions rounded to 1 decimal place. (i.e. 5,500,000 should be entered as 5.5). Accounts Payable Accounts Receivable Accumulated Depreciation Advertising Expense Fair Value $ 14,400,000 26,200,000 4,400,000 7,800,000 12,200,000 Balance Sheet Liabilities…
Painted Desert has acquired several companies. Assume that Painted Desert purchased Oak Tree Unlimited for $14,000,000 cash. The book value of Oak Tree Unlimited's assets is $14,000,000 (fair value, $15,000,000), and it has liabilities of $13,000,000 (fair value, $13,000,000). Requirements 1. Compute the cost of goodwill purchased by Painted Desert. 2. Record the purchase of Oak Tree Unlimited by Painted Desert. Requirement 1. Compute the cost of goodwill purchased by Painted Desert. Purchase price to acquire Oak Tree Unlimited Fair value of Oak Tree Unlimited's assets Less: Fair value of Oak Tree Unlimited's liabilities Less: Fair value of Oak Tree Unlimited's net assets Goodwill Requirement 2. Record the purchase of Oak Tree Unlimited by Painted Desert. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit…
Exercise 7-6 (Algo) Calculate the amount of goodwill (LO7-2) Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $44,000,000 in cash. The book values and fair values of Iceberg's assets and liabilities were as follows: Current assets Property, plant, and equipment Other assets Current liabilities Long-term liabilities Required: Book Value $ 16,000,000 30,800,000 5,200,000 9,600,000 16,400,000 Fair Value $ 19,000,000 36,800,000 6,200,000 9,600,000 15,400,000 Calculate the amount paid for goodwill. (Enter your answer in millions (i.e. 5,000,000 should be entered as 5).) Amount paid for goodwill million
305. Subject : - Accounting
auisitions Problem 23-5 (IAA) 1. Nutty Company made the following individual cash purchases: 000,000 taken. Land and building Machinery and office Delivery equipment 6,000,000 1,800,000 500,000 equipment the old lachine An appraisal disclosed the following fair value: 1,000,000 3,000,000 800,000 400,000 350,000 Land entity onthly chine Building Machinery Office equipment Delivery equipment 2. Nutty Company acquired the assets of another entity with the following fair value: sed a rest The 1,000,000 5,000,000 2,000,000 Land Building Machinery The entity issued 60,000 shares with P100 par value in exchange. The share had a quoted price of P150 on the date of purchase of the property. of ary 3. Received a parcel of land located in Davao City from a philanthropist as an inducement to locate a plant in the city. The land has a fair value of P1,500,000. is- 4. The entity paid cash for machinery, P900,000 subject to 2% cash discount, and freight on machinery, P35,000. 5. The entity acquired…
ACME Co. paid $110,000 for the net assets of Comb Corp. At the time of the acquisition the following information was available related to Comb's balance sheet: Book Value Fair Value Current Assets $50,000 $ 50,000 Building 80,000 100,000 Equipment 40,000 50,000 Liabilities 30,000 30,000 What is the amount recorded by ACME for the Building? a. $110,000 b. $20,000 c. $80,000 d. $100,000
Machinery and office equipment 2. Nutty Company acquired the assets of another entity with An appraisal disclosed the following fair value: bany made the following individual cash Nutty purchases: Land and building 1. Delivery equipment 6,000,000 1,800,000 500,000 Land Building 1,000,000 3,000,000 800,000 400,000 350,000 Machinery Office equipment Delivery equipment the following fair value: Land Building Machinery 1,000,000 5,000,000 2,000,000 The entity issued 60,000 shares with P100 par value in exchange. The share had a quoted price of P150 on the date of purchase of the property. 3. Received a parcel of land located in Davao City from a philanthropist as an inducement to locate a plant in the city. The land has a fair value of P1,500,000. 4. The entity paid cash for machinery, P900,000 subject to 2% cash discount, and freight on machinery, P35,000. D. The entity acquired furniture and fixtures by issuing a P400,000 two-year noninterest-bearing note. In similar transactions, the…
Noncurrent Asset Held for Sale The statement of financial position of an entity on December 31, 20x1 shows the following information: Cash and cash equivalents 600,000 Trade and other receivables 1,200,000 Inventories 3,600,000 Investment property (Cost model) 1,400,000 Investment in associate 800,000 Property, plant and equipment 5,000,000 Total assets 12,600,000 Trade and other payables 4,900,000 Current tax payable 1,800,000 Deferred tax liability 700,000 Ordinary share capital 2,000,000 Retained earnings 2,700,000 Other components of equity 500,000 Total liabilities & equity 12,600,000 On December 31, 20x1, the entity commits to a plan to sell the investment property. All conditions of PFRS 5 are met. The fair value of the investment property on this date is P1,600,000 while the estimate of costs to sell is P50,000. Explain why is it considered as a noncurrent asset held for sale. And what should be the journal entry
ACME Co. paid $110,000 for the net assets of Comb Corp. At the time of the acquisition the following information was available related to Comb's balance sheet: Book Value Fair Value Current Assets $50,000 $ 50,000 Building 80,000 100,000 Equipment 40,000 50,000 Liabilities 30,000 30,000 What is the amount recorded by ACME for the Building? a. $110,000 b. $20,000 c. $80,000 d. $100,000
Answer
Case 3: DREXLER CORPORATION Information concerning Drexler Corporation's intangible assets is as follows: 1. On January 1, 20x4, Drexler signed an agreement to operate as a franchisee of Houston Copy Service, Inc., for an initial franchise fee of P255,000. Of this amount, P75,000 was paid when the agreement was signed, and the balance is payable in four (4) annual payments of P45,000 each beginning January 1, 20x5. The agreement provides that the down payment is not refundable, and no future services are required of the franchisor. The implicit rate for a loan of this type is 14%. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Drexler's revenue from the franchise for 20x4 was P2,700,000. Drexler estimates the useful life of the franchise to be 10 years. 2. Drexler incurred P234,000 of experimental and development costs in its laboratory to develop a patent which was granted on January 2, 20x4. Legal fees and other costs…