2 3 On April 30, 2024, Cardamom Corporation acquired all of the outstanding common stock of Killarney 4 Corporation for $18,000,000 in cash. The book values and fair values of Killarney's assets and 5 liabilities were as follows: 6 7 Amount paid for all of the outstanding common stock 8 9 10 Current assets 11 Property, plant, and equipment 12 Other assets 13 Current liabilities 14 Long-term liabilities 15 16 Calculate the amount paid for goodwill. 17 18 Book Value $6,000,000 11,400,000 1,200,000 3,600,000 6,120,000 $18,000,000 Fair Value $7,800,000 14,820,000 1,560,000 3,600,000 5,810,000

2 3 On April 30, 2024, Cardamom Corporation acquired all of the outstanding common stock of Killarney 4 Corporation for $18,000,000 in cash. The book values and fair values of Killarney's assets and 5 liabilities were as follows: 6 7 Amount paid for all of the outstanding common stock 8 9 10 Current assets 11 Property, plant, and equipment 12 Other assets 13 Current liabilities 14 Long-term liabilities 15 16 Calculate the amount paid for goodwill. 17 18 Book Value $6,000,000 11,400,000 1,200,000 3,600,000 6,120,000 $18,000,000 Fair Value $7,800,000 14,820,000 1,560,000 3,600,000 5,810,000

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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8. Kopi Company acquired all of the outstanding ordinary shares of an acquiree paying P9,000,000 cash. The carrying amount and fair value of the assets and liabilities of the acquiree were: Carrying amount Fair Value Accounts receivable P 1,500,000 Inventory 4,800,000 Land 7,500,000 Property and Equipment 2,500,000 Accounts payable 2,500,000 Bonds Payable 1,900,000 P 1,200,000 3,000,000 5,000,000 2,000,000 2,500,000 1,500,000 What amount should be recognized as goodwill or negative goodwill? a. P 1,900,000 b. P-1,900,000 c. P 2,900,000 d. P-2,900,000
26. Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $13,280,000 in cash. The book value of Smith’s net assets (assets minus liabilities) was $9,700,000. The fair values of all of Smith’s assets and liabilities were equal to their book values with the following exceptions: Book Value Fair Value Receivables $ 3,200,000 $ 2,810,000 Property, plant, and equipment 9,900,000 11,490,000 Intangible assets 390,000 1,580,000 Required:Calculate the amount paid for goodwill.
2. Cinema Company acquired 75 percent of Movie Corporation's shares on December 31, 2015, at underlying book value of $98,000. At that date, the fair value of the noncontrolling interest was equal to 25 percent of the book value of Movie Corporation. Movie's balance sheet on January 1, 2018, contained the following balances: Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Total Assets $50,000 Accounts Payable 35,000 Bonds Payable 40,000 Common Stock 300,000 Additional Paid-In Capital (100,000) Retained Earnings $325,000 Total Liabilities and Equities $40,000 100,000 50,000 Prepare the entries recorded on the books of each company. 75,000 60,000 $325,000 On January 1, 2018, Movie acquired 3,500 of its own $2 par value comm on shares from Nonaffiliated Corporation for $6 per share.
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L2-4 Awe Company pays CU500,000,000 for a 30% interest in Groy Company on July 1, 19x2 when the book value of Groy Company's net assets equals fair value. Awe Company amortizes any goodwill from this investment over 20 years. Information related to Groy Company is as follows: 31 Desember 19x1 31 Desember 19x2 Share capital, nominal IDR 1,000 Rp600.000.000 Rp600.000.000 Retained earning 400.000.000 500.000.000 Total Shareholders' Equity 1.000.000.000 1.100.000.000 Net profit earned during the year 19x2 200.000.000 Dividend for the year 19x2 (paid on March 1 of Rp. 50,000,000 and September 1 of Rp. 50,000,000) 100.000.000 Required: calculate Awe Company's revenue from Groy Company for the year 19x2
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Accounting On January 1, 2022, Pronto Company acquired all of Speedy Inc.'s voting stock for $28,800,000. Speedy's net assets were reported at amounts approximating book value, but Pronto determined that Speedy had the following previously unreported intangible assets: Developed technology, fair value $2,400,000, 5-year life • Favorable leases, fair value $1,200,000, 4-year life ● Speedy's shareholders' equity on January 1, 2022, was $12,000,000. It is now December 31, 2023 (two years later). Speedy reported net income of $960,000 in 2022. There are no impairments of identifiable intangibles or goodwill in 2022 or 2023. Pronto uses the complete equity method to report its investment in Speedy on its own books. Speedy's December 31, 2023, trial balance appears below. Dr (Cr) $24,000,000 Current assets Property and equipment, net 60,000,000 Liabilities (69,600,000) Capital stock (2,400,000) Retained earnings, January 1 (10,560,000) Sales revenue (84,000,000) Cost of goods sold 72,000,000…
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