Arcadia, Incorporated, acquired 100 percent of the voting shares of Bruno Company on January 1, 2023. In exchange, Arcadia pald $241,000 in cash and Issued 100,000 shares of its own $1 par value common stock. On this date, Arcadia's stock had a fair value of $15 per share. The combination is a statutory merger with Bruno subsequently dissolved as a legal corporation. Bruno's assets and liabilities are assigned to a new reporting unit. The following shows fair values for the Bruno reporting unit for January 1, 2023, along with respective carrying amounts on December 31, 2024. Bruno Reporting Unit Cash Receivables Inventory Patents Royalty agreements Equipment (net) Goodwill Accounts payable Long-term liabilities Fair Values 1/1/23 $ 74,000 Carrying Amounts 12/31/24 $ 43,000 203,250 238,000 205,500 253,000 583,500 670,000 660,750 630,000 374,500 308,000 ? 416,000 (136,000) (640,500) (198,000) (558,000) Note: Parentheses indicate a credit balance. Required: a. Prepare Arcadia's journal entry to record the assets acquired and the liabilities assumed in the Bruno merger on January 1, 2023. b. On December 31, 2024, Arcadia opts to forgo any goodwill impairment qualitative assessment and estimates that the total fair value of the entire Bruno reporting unit is $1,650,000. What amount of goodwill Impairment, if any, should Arcadia recognize on its 2024 Income statement? Complete this question by entering your answers in the tabs below. Required A Required B Prepare Arcadia's journal entry to record the assets acquired and the liabilities assumed in the Bruno merger on January 1, 2023. Note: Enter cash paid and cash received as two separate amounts. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 Record the assets acquired and the liabilities assumed in the Bruno merger on January 1, 2023.
Arcadia, Incorporated, acquired 100 percent of the voting shares of Bruno Company on January 1, 2023. In exchange, Arcadia pald $241,000 in cash and Issued 100,000 shares of its own $1 par value common stock. On this date, Arcadia's stock had a fair value of $15 per share. The combination is a statutory merger with Bruno subsequently dissolved as a legal corporation. Bruno's assets and liabilities are assigned to a new reporting unit. The following shows fair values for the Bruno reporting unit for January 1, 2023, along with respective carrying amounts on December 31, 2024. Bruno Reporting Unit Cash Receivables Inventory Patents Royalty agreements Equipment (net) Goodwill Accounts payable Long-term liabilities Fair Values 1/1/23 $ 74,000 Carrying Amounts 12/31/24 $ 43,000 203,250 238,000 205,500 253,000 583,500 670,000 660,750 630,000 374,500 308,000 ? 416,000 (136,000) (640,500) (198,000) (558,000) Note: Parentheses indicate a credit balance. Required: a. Prepare Arcadia's journal entry to record the assets acquired and the liabilities assumed in the Bruno merger on January 1, 2023. b. On December 31, 2024, Arcadia opts to forgo any goodwill impairment qualitative assessment and estimates that the total fair value of the entire Bruno reporting unit is $1,650,000. What amount of goodwill Impairment, if any, should Arcadia recognize on its 2024 Income statement? Complete this question by entering your answers in the tabs below. Required A Required B Prepare Arcadia's journal entry to record the assets acquired and the liabilities assumed in the Bruno merger on January 1, 2023. Note: Enter cash paid and cash received as two separate amounts. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 Record the assets acquired and the liabilities assumed in the Bruno merger on January 1, 2023.
Chapter7: Corporations: Reorganizations
Section: Chapter Questions
Problem 43P
Related questions
Question
Transcribed Image Text:Arcadia, Incorporated, acquired 100 percent of the voting shares of Bruno Company on January 1, 2023. In exchange, Arcadia pald
$241,000 in cash and Issued 100,000 shares of its own $1 par value common stock. On this date, Arcadia's stock had a fair value of $15
per share. The combination is a statutory merger with Bruno subsequently dissolved as a legal corporation. Bruno's assets and
liabilities are assigned to a new reporting unit.
The following shows fair values for the Bruno reporting unit for January 1, 2023, along with respective carrying amounts on December
31, 2024.
Bruno Reporting Unit
Cash
Receivables
Inventory
Patents
Royalty agreements
Equipment (net)
Goodwill
Accounts payable
Long-term liabilities
Fair Values
1/1/23
$ 74,000
Carrying Amounts
12/31/24
$ 43,000
203,250
238,000
205,500
253,000
583,500
670,000
660,750
630,000
374,500
308,000
?
416,000
(136,000)
(640,500)
(198,000)
(558,000)
Note: Parentheses indicate a credit balance.
Required:
a. Prepare Arcadia's journal entry to record the assets acquired and the liabilities assumed in the Bruno merger on January 1, 2023.
b. On December 31, 2024, Arcadia opts to forgo any goodwill impairment qualitative assessment and estimates that the total fair value
of the entire Bruno reporting unit is $1,650,000. What amount of goodwill Impairment, if any, should Arcadia recognize on its 2024
Income statement?
Complete this question by entering your answers in the tabs below.
Required A
Required B
Prepare Arcadia's journal entry to record the assets acquired and the liabilities assumed in the Bruno merger on January 1, 2023.
Note: Enter cash paid and cash received as two separate amounts. If no entry is required for a transaction/event, select "No journal
entry required" in the first account field.
View transaction list
Journal entry worksheet
<
1
Record the assets acquired and the liabilities assumed in the Bruno merger on
January 1, 2023.
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