A Ltd purchases the B Ltd for the following consideration of: Cash : $150 000 Land: carrying amount of the land is $120 000; fair value is $195 000. The statement of financial position of the B Ltd as at the date of acquisition shows assets of $390 000 and liabilities of $195 000. All assets are fairly valued except the B Ltd's building, which is in the accounts at $70 000 but has a fair value of $95 000. There are no contingent liabilities. Required: Calculate the value of goodwill?
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A Ltd purchases the B Ltd for the following consideration of:
Cash : $150 000
Land: carrying amount of the land is $120 000; fair value is $195 000.
The
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- A Ltd purchases the B Ltd for the following consideration of: Cash : $150 00 Land: carrying amount of the land is $120 000; fair value is $195 000. The statement of financial position of the B Ltd as at the date of acquisition shows assets of $390 000 and liabilities of $195 000. All assets are fairly valued except the B Ltd's building, which is in the accounts at $70 000 but has a fair value of $95 000. There are no contingent liabilities. Required: Calculate the value of goodwill? Note: Provide all workings. Do not just write the final answer.Horan Ltd purchases the Coolum Store for the consideration of: Cash $250,000 Land Horan Ltd is going to transfer the title of some land to the owners of the Coolum Store (the carrying amount of the land is $120 000; fair value is $295,000). The statement of financial position of the Coolum Store as at the date of acquisition shows assets of $290,000 and liabilities of $95,000. All assets are fairly valued except the Coolum Store's building, which is in the financial statements at $60,000 but has a fair value of $85,000. There are no contingent liabilities. Required Calculate the amount of goodwill?MAP Ltd acquired a Machine from FAT Ltd for the following consideration:o Cash $65 000,o Land in the books of MAP Ltd the land is recorded at its cost of $750 000.It has a fair value of $700 000.MAP Ltd also agrees to assume the liability of the FAT Ltd bank loan of $95 000 as part ofthe Machine acquistion Calculate the acquisition cost of the Machine Provide the journal entries that would appear in MAP Ltd.’s books to accountfor the acquisition of the Machine.
- 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 Notes Payable - Bank (long-term) 1,950,000 Net assets at fair value 100,000 850,000 1,300,000 4,300,000 950,000 1,000,000 4,600,000 Compute for the amount of goodwill using residual approach. a. P 1,450,000 b. 3,400,000 c. P 4,600,000 d. P 2,900,000Mainline 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…2) On January 1, 2019, PT Papa provided cash of Rp. 3 billion to acquire PT Soni's net assets. PT Papa incurs additional costs for the acquisition, namely: The appraisal fee for valuing PT Soni is IDR 150,000,000 Legal fee for transfer of assets Rp90,000,000 The following is the book value and fair value of PT Soni's assets, liabilities and equity in the statement of financial position at the acquisition date: PT Soni Statement of financial position January 1, 2019 Carrying Amount Fair Value Kas 60.000.000 60.000.000 Account receivable 210.000.000 210.000.000 Inventory 390.000.000 540.000.000 Land 240.000.000 600.000.000 Building &…
- Bryer Co. purchases all of the assets and liabilities of Stellar Co. for $1,500,000. The fair value of Stellar’s assets is $2,000,000, and its liabilities have a fair value of $1,200,000. The book value of Stellar’s assets and liabilities are not known. For what amount would Bryer record goodwill associated with the purchase? a. $800,000.b. $500,000.c. $700,000.d. $0.Stewart Company exchanges an asset with Leonard Corporation. Details of the exchange are as follows: Stewart company’s Piece of Equipment: Cost $1,000,000Accumulated depreciation 400,000Fair Value $800,000 Leonard Corporation’s Building: Cost $1200,000 Accumulated depreciation $550,000 Fair Value $950,000 Required a) Prepare the appropriate journal entries for both companies for the above exchange assumingthey are public companies.b) If Stewart Company paid $100,000 in this transaction. Record the appropriate journal entry inStewart’s books.c) Repeat b) assuming that Stewart Company is a private company and that the fair value ofLeonard’s building is the most determinable fair valueamount of P650,000 and a fair value P500,000. any exchanged a delivery truck costing Bronze Co P1.000,000 for a parcel of land. The truck had a carrying a The entity gave P600,000 in cash in addition to the truck as part of this transaction. It is expected that the cash flows from the assets will be significantly different. The previous owner of the land had listed the land for sale at P1,200,000. At what amount should Bronze record the land? a. 1,100,000 b. 1,250,000 c. 1,150,000 d. 1,200,000
- Charles Ltd (C Ltd) owns equipment with market value of $2,000,000 and cost of $2,200,000. Success Ltd (S Ltd) owns a building with market value of $2,400,000 and cost of $2,100,000. C Ltd and S Ltd exchange their assets. The accumulated depreciation is $20,000 for both the equipment and building. S Ltd gives C Ltd a cash amount of $70,000 in the exchange. Prepare journal entries to record the exchange of asset in the books of C Ltd and S Ltd. if the exchange is considered to be having commercial substance. Suppose that S Ltd. does not pay C Ltd $70,000. Now record the transaction in the books of C Ltd and S Ltd. assuming the exchange is considered to lack commercial substance. The accountant of Charles Ltd states that ‘any expenditure subsequently spent after the purchase of plant assets should be recorded as an expense item rather than added to the cost of plant assets’. Do you agree with the statement above? Explain and support your answer with examples.Columbia recently acquired all of Mercury's net assets in a business acquisition. The cash purchase price was $22,000,000. Mercury's assests and liabilites had the following costs and appraised values: Current assets Land, building and equipment Current liabilites Mortgage payable How much goodwill will rewult from this transaction? Cost Basis $ 6,000,000 $ 14,000,000 Appraised Value $ 6,000,000 $23,000,000 $4,000,000 $4,000,000 $ 10,000,000 $10,000,000Lei Company acquired a financial asset at its market value of P4,800,000. Broker fees of P300,000 were incurred in relation to the purchase. At what amount should the financial asset initially be recognized if it is classified as: 1. At Fair value through profit or loss _________________ 2. As available for sale _____________________