Business Combination Versus Asset Acquisition Haley Corporation pays $3,900,000 in cash to acquire assets from Jaxon Inc., as follows: Fair Value $1,800,000 1,260,000 540,000 Machinery and equipment Developed technology (limited-life) Customer lists (limited-life) In addition, Haley pays $100,000 in cash for legal and advisory costs connected with the acquisition. Required Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions. a. Prepare the journal entry to record the acquisition, assuming it qualifies as a business combination.

Business Combination Versus Asset Acquisition Haley Corporation pays $3,900,000 in cash to acquire assets from Jaxon Inc., as follows: Fair Value $1,800,000 1,260,000 540,000 Machinery and equipment Developed technology (limited-life) Customer lists (limited-life) In addition, Haley pays $100,000 in cash for legal and advisory costs connected with the acquisition. Required Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions. a. Prepare the journal entry to record the acquisition, assuming it qualifies as a business combination.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

W Co. acquired the intangible assets listed below for a total lump sum price of P400,000. Intangible asset Service mark Order and production backlogs In-house research and development Fair value P160,000 120,000 80,000 120,000 How much is the initial measurement of the masthead? Masthead Your answer On January 1, 20x1, M Co. incurred P500,000 in registering a patent. It was initially estimated that the useful life of the asset is 20 years, equal to its legal life. However, on January 1, 20x6, M assessed that the useful life of the patent was only 15 years starting on the date of registration. How much is the amortization expense in 20x6? Your answer
COMPUTE FOR THE GOODWILL.
Identifiable Intangibles and Goodwill Prince Corporation acquires Squire Service Corporation for one million shares of Prince stock, valued at $35 per share. Squire is merged into Prince, although it continues to do business under the Squire Service name. Professional fees connected with the acquisition are $1,200,000 and costs of registering and issuing the new shares are $600,000, both paid in cash. Squire performs vehicle maintenance services for owners of auto, truck and bus fleets. Squire's balance sheet at acquisition is as follows: Cash Accounts receivable Parts inventory Equipment Total assets $300,000 Current liabilities 2,700,000 Long-term liabilities 5,200,000 Shareholders' equity 17,600,000 $25,800,000 Total liabilities and equity $25,800,000 In reviewing Squire's assets and liabilities, you determine the following. 1. On a discounted present value basis, the accounts receivable have a fair value of $2,600,000, and the long-term liabilities have a fair value of $8,000,000.…
None
Effects of qualifying as a business on asset acquisitions Assume that on January 1, 2016 an investor company paid $8,700 to an investee company in exchange for the following assets and liabilities transferred from the investee company: Investee's Estimated Fair Asset (Liability) Production equipment Book Value Value $900 $780 4,500 300 4,290 1,170 1,560 Factory Land Patents In addition, the investor provided to the seller contingent consideration with a fair value of $200 and the investor paid an additional $300 of transaction costs to an unaffiliated third party. The contingent consideration has a potential settlement value of $450 in two years, and is not a derivative financial instrument. The book values are from the investee's financial records immediately before the exchange. The fair values are measured in accordance with FASB ASC 820: Fair Value Measurement. Parts a. and b. are independent of each other. If no additional debit or credit entries are required, select "No entry" as…
Tesla acquired Amazon, for $33,520,000. The fair value of all Amazon's identifiable tangible and intangible assets was $30,000,000. Short will amortize any goodwill over the maximum number of years allowed. What is the annual amortization of goodwill for this acquisition? Multiple Choice O O $880,000 $1,760,000 $O $3,520,000 < Prev 6 of 25 Save & Ex Next
The following are several figures reported for Allister and Barone as of December 31, 2021: Allister Barone $ 500,000 $ 300,000 1,000,000 not given 500,000 230,000 Inventory Sales 800,000 Investment income Cost of goods sold Operating expenses 400,000 300,000 Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $78,000 that was unrecorded on its accounting records and had a four-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2021, Barone sells inventory costing $130,000 to Allister for $180,00o. Of this amount, 10 percent remains unsold in Allister's warehouse at year-end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2021: Amounts Inventory Sales Cost of goods sold Operating expenses Net income attributable…
Should Gee Co. proceed with the acquisition of Bea Co.? yes or no? show your solution. The management team of Gee Co. is deciding to acquire Bea Co. an entity that sells a product that compliments its own product. The management of Bea Co. demands a price of P18,000,000 for it to agree with the acquisition by Gee Co. Relevant data gathered for annual operations are as follows: Gee Co. Вea Co. Combined Average Net Income Depreciation Expense 3,500,000 2,500,000 6,500,000 250,000 150,000 350,000 WACC 12% 15% 12.50%
Assume that a drilling machine is acquired for the following consideration: cash: $200,000 shares: 20,000 shares with a market value of $4.50 each Machine: Cost $100,000, accumulated depreciation, $75,000, fair value $37,000 The buying company also agrees to assume the liability of the selling company’s accounts payable of $25 000 as part of the drilling machine acquisition. Required: Calculate the acquisition cost of the drilling machine
Use the following information for question 6 and 7: Marksman acquired 100 percent of Tribal Transit for P275,000. At the date of acquisition, Fast Transit had the following book and market values: Book Value Market Value Cash and Receivables P30,000 P30.000 Inventory 100,000 120,000 Plant Assets (net) 210,000 300,000 Current Liabilities (45,000) (45,000) Long-term Debt (115,000) (115,000) Common Stock (10,000) Retained Earnings (170,000) 6. What is the amount of the "Investment in Tribal Transit" account on Marksman's financial records at the acquisition date? 7. What amount of pre-acquisition earnings is eliminated in the acquisition date worksheet elimination?
Please help me to solve this problem
Hoolia Corporation acquires equipment and patents from another company for $50 million and records the acquisition as an asset acquisition. The equipment has a fair value of $19.20 million and the patents have a fair value of $28.80 million. Neither asset is nonqualifying. At what value does Hoolia record the equipment? Select one: a. $25.0 million b. $20.0 million c. $21.2 million d. $19.2 million