Show the solution in good accounting form Coronation company purchased an entity for 6,000,000 cash on January 31. The book value and fair value of the assets of the acquired entity as of the date of acquisition of follow:Question: What is the good arising from the acquisition?A. 4,450,000B. 700,000C. 2,450,000D. 2,700,000 Book ValueFair Value50,000500,000Cash50,000 P500,000Accounts receivableInventory1,000,0001,500,000250,0003,000,000PatentProperty, plant and equipment2,000,000In addition, the acquired entity had liabilities totaling P2,000,000 at the time of theacquisition. The acquired entity has no other separately identifiable intangible assets.

Ans. On the acquisition date, assets and Liabilities shall be valued at fair value and not on the…

Book Value Fair Value 50,000 P 500,000 1,000,000 Cash 50,000 500,000 1,500,000 250,000 3,000,000 Accounts receivable Inventory Patent Property, plant and equipment 2,000,000 In addition, the acquired entity had liabilities totaling P2,000,000 at the time of acquisition. The acquired entity has no other separately identifiable intangible asset

Book Value Fair Value 50,000 P 500,000 1,000,000 Cash 50,000 500,000 1,500,000 250,000 3,000,000 Accounts receivable Inventory Patent Property, plant and equipment 2,000,000 In addition, the acquired entity had liabilities totaling P2,000,000 at the time of acquisition. The acquired entity has no other separately identifiable intangible asset

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 9MC

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