Business Combination Versus Asset Acquisition As part of a project, Webflow Inc. acquire hese assets from Digital Sea Company (in millions): Cash... Trading debt investments Equipment Fair Value $4 6 240
Business Combination Versus Asset Acquisition As part of a project, Webflow Inc. acquire hese assets from Digital Sea Company (in millions): Cash... Trading debt investments Equipment Fair Value $4 6 240
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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
Transcribed Image Text:Only Part B please and thank you!
E2.20 Business Combination Versus Asset Acquisition As part of a project, Webflow Inc. acquires
these assets from Digital Sea Company (in millions):
Cash...
Trading debt investments
Equipment
In-process R&D
Fair Value
$4
6
240
60
The in-process R&D has no alternative future use. Webflow pays $335 million in cash for the acquired
assets, and also pays $5 million in cash for legal and advisory costs.
Required
a. Prepare the journal entry to record the acquisition if it qualifies as a business combination.
b. Prepare the journal entry to record the acquisition if it is an asset acquisition. Assume the cash and
trading investments are nonqualifying assets.
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