9. Busquets Plc. acquired 100% of Neymar Ltd. in 2022. The table below reports the book value and the fairvalue of the assets and liabilities of Neymar Ltd. at the time of the acquisition:Amounts in £CashAccounts receivablePPELiabilitiesBook valueANSWER: D20010050050Fair value20018075070Busquets Plc. paid £2,000 in cash for Neymar and there were no costs associated with the acquisition.As a result of the acquisition, the total assets of Busquets Plc.a. Increase by £2,000b. Decrease by £2,000c. Do not changed.Increase by £70e. None of the above

Analysis of the given case:Let us break-down the transactions & consider their effect on the…

9. Busquets Plc. acquired 100% of Neymar Ltd. in 2022. The table below reports the book value and the fair value of the assets and liabilities of Neymar Ltd. at the time of the acquisition: Amounts in £ Cash Accounts receivable PPE Liabilities a. Increase by £2,000 b. Decrease by £2,000 Book value c. Do not change d. Increase by £70 e. None of the above 200 100 500 50 Fair value Busquets Plc. paid £2,000 in cash for Neymar and there were no costs associated with the acquisition. As a result of the acquisition, the total assets of Busquets Plc. 200 180 750 70

9. Busquets Plc. acquired 100% of Neymar Ltd. in 2022. The table below reports the book value and the fair value of the assets and liabilities of Neymar Ltd. at the time of the acquisition: Amounts in £ Cash Accounts receivable PPE Liabilities a. Increase by £2,000 b. Decrease by £2,000 Book value c. Do not change d. Increase by £70 e. None of the above 200 100 500 50 Fair value Busquets Plc. paid £2,000 in cash for Neymar and there were no costs associated with the acquisition. As a result of the acquisition, the total assets of Busquets Plc. 200 180 750 70

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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