23422256 Inventory7 Copyrights8 Patented technology9 Total assets10Current liabilities11 Long-term liabilities12 Common stock13141516 Contingent performance liability17 Soriano's IPR&D appraised value18 Cash paid for Soriano19 Cash paid for Soriano2025On May 1, Soriano Company reported the following account balances along with their estimated fair values:26Receivables27Account23 The following information was also available:30Retained earningsCarrying AmountOn that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To21facilitate the merger, Zambrano also paid $102,000 to an investment banking firm.$247,700$81,200$127,100$881,000$1,337,000$255,000$742,000$104,000$236,000$1,337,000Fair Value$247,700$81,200$507,500$659,600$1,496,000$255,000$731,800$36,400$227,500$678,000$798,100Zambrano further agreed to pay an extra $72,400 to the former owners of Soriano only if they meet certain revenue goals during thenext two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $36,400.Soriano has a research and development project in process with an appraised value of$227,500. However, the project has not yetreached technological feasibility, and the project's assets have no alternative future use.2829 Required:Note: Use cells A4 to C19 from the given information to complete this question. Allanswers should be input and displayed as positive values.$678,0003132a. Determine whether there is a gain on bargain purchase or goodwill if $678,000 of cash was paid for Soriano.3334 Cash paid35 Contingent performance liability36 Total consideration transferred37 Fair value of net assets38 Gain on bargain purchase3940 b. Determine whether there is a gain on bargain purchase or goodwill if $798,100 of cash was paid for Soriano.4142 Cash paid43 Contingent performance liability44 Total consideration transferred45 Fair value of net assets46 Goodwill

Gain on bargain purchase occurs when an acquiring company pays less for the net assets of another…

a. Determine whether there is a gain on bargain purchase or goodwill if $678,000 of cash was paid for Soriano. Cash paid Contingent performance liability Total consideration transferred Fair value of net assets Gain on bargain purchase b. Determine whether there is a gain on bargain purchase or goodwill if $798,100 of cash was paid for Soriano. Cash paid Contingent performance liability $678,000 Total consideration transferred Fair value of net assets Goodwill

a. Determine whether there is a gain on bargain purchase or goodwill if $678,000 of cash was paid for Soriano. Cash paid Contingent performance liability Total consideration transferred Fair value of net assets Gain on bargain purchase b. Determine whether there is a gain on bargain purchase or goodwill if $798,100 of cash was paid for Soriano. Cash paid Contingent performance liability $678,000 Total consideration transferred Fair value of net assets Goodwill

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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Answer in detail
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