Acquiring net assets that constitute a business Assume on January 1, 2022 an investor company paid $1,188 to an investee company in exchange for the following assets and liabilities transferred from the investee company: Asset (Liability) Estimated Fair Value Production equipment $420 Factory Licenses n addition, the investor provided to the seller contingent consideration with a fair value of $120 and the investor paid an additional $48 of transaction costs to an unaffilia hird party. The contingent consideration is not a derivative financial instrument. The fair values are measured in accordance with FASB ASC 820: Fair Value Measurement Assume the net assets transferred from the investee qualify as a "business," as that term is defined in FASB ASC Master Glossary. At what amount will Goodwill be report he financial statements of the acquiring company on January 1, 2022? Select one: ■. $12 D. $108 - $36 480 300

Acquiring net assets that constitute a business Assume on January 1, 2022 an investor company paid $1,188 to an investee company in exchange for the following assets and liabilities transferred from the investee company: Asset (Liability) Estimated Fair Value Production equipment $420 Factory Licenses n addition, the investor provided to the seller contingent consideration with a fair value of $120 and the investor paid an additional $48 of transaction costs to an unaffilia hird party. The contingent consideration is not a derivative financial instrument. The fair values are measured in accordance with FASB ASC 820: Fair Value Measurement Assume the net assets transferred from the investee qualify as a "business," as that term is defined in FASB ASC Master Glossary. At what amount will Goodwill be report he financial statements of the acquiring company on January 1, 2022? Select one: ■. $12 D. $108 - $36 480 300

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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Question

Acquiring net assets that constitute a business
Assume on January 1, 2022 an investor company paid $1,188 to an investee company in exchange for the following assets and liabilities transferred from the investee
company:
Asset (Liability) Estimated Fair Value
Production equipment $420
480
Factory
Licenses
300
In addition, the investor provided to the seller contingent consideration with a fair value of $120 and the investor paid an additional $48 of transaction costs to an unaffiliated
third party. The contingent consideration is not a derivative financial instrument. The fair values are measured in accordance with FASB ASC 820: Fair Value Measurement.
Assume the net assets transferred from the investee qualify as a "business," as that term is defined in FASB ASC Master Glossary. At what amount will Goodwill be reported in
the financial statements of the acquiring company on January 1, 2022?
Select one:
a. $12
b. $108
c. $36
d. SO

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