Arcadia, Incorporated, acquired 100 percent of the voting shares of Bruno Company on January 1, 2023. In exchange, Arcadia paid $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 Fair Values 1/1/23 Carrying Amounts 12/31/24 Cash $ 74,000 $ 43,000 Receivables 203,250 238,000 Inventory 205,500 253,000 Patents 583,500 670,000 Royalty agreements 660,750 630,000 Equipment (net) 374,500 308,000 Goodwill ? 416,000 Accounts payable (136,000) (198,000) Long-term liabilities (640,500) (558,000) Note: Parentheses indicate a credit balance. Required: a. Calculate the goodwill recognized in the combination with formulas for excel.
Arcadia, Incorporated, acquired 100 percent of the voting shares of Bruno Company on January 1, 2023. In exchange, Arcadia paid $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 Fair Values 1/1/23 Carrying Amounts 12/31/24 Cash $ 74,000 $ 43,000 Receivables 203,250 238,000 Inventory 205,500 253,000 Patents 583,500 670,000 Royalty agreements 660,750 630,000 Equipment (net) 374,500 308,000 Goodwill ? 416,000 Accounts payable (136,000) (198,000) Long-term liabilities (640,500) (558,000) Note: Parentheses indicate a credit balance. Required: a. Calculate the goodwill recognized in the combination with formulas for excel.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Arcadia, Incorporated, acquired 100 percent of the voting shares of Bruno Company on January 1, 2023. In exchange, Arcadia paid $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 | Fair Values 1/1/23 | Carrying Amounts 12/31/24 |
|---|---|---|
| Cash | $ 74,000 | $ 43,000 |
| Receivables | 203,250 | 238,000 |
| Inventory | 205,500 | 253,000 |
| Patents | 583,500 | 670,000 |
| Royalty agreements | 660,750 | 630,000 |
| Equipment (net) | 374,500 | 308,000 |
| ? | 416,000 | |
| Accounts payable | (136,000) | (198,000) |
| Long-term liabilities | (640,500) | (558,000) |
Note: Parentheses indicate a credit balance.
Required:
a. Calculate the goodwill recognized in the combination with formulas for excel.
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