Calculate the amount of goodwill recognized, if any, on July 31, 2020, Goodwill
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- On August 31, 2020, Southampton Co. acquired all of the common stock of Brighton Company, which became a division of Southampton Co. Brighton Company reported the followir statement of financial position at the time of the acquisition: Brighton Company Statement of Financial Position Assets Equity and Liabilities Share capital- Plant assets (ne t) $1,350,000 $1,150,000 ordinary 235,000 Retained earnings Inventory Receivables 1,070,000 587.000 800,000 Accounts payable Cash 422.000 Total assets $2.807.000 Total equity and liabilities $2.807.000 An appraisal indicated that the fair value of the inventory was $372,000 and the fair value of the plant assets was $1,550,000. The agreed purchase price was $3,600,000, and this amount was paid in cash to the previous owners of Brighton Company. Required: a. Prepare the entry to record the purchase of Brighton Company. b. Assume that the carrying amount of Brighton Company division's net assets, including goodwill is $2.550,000. The recoverable…On July 31, 2020, Carla Vista Company paid $2,700,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Carla Vista. Conchita reported the following balance sheet at the time of the acquisition. Current assets Noncurrent assets Total assets $730,000 2,400,000 $3,130,000 Current liabilities Long-term liabilities Stockholders' equity Total liabilities and stockholders' equity Current assets Noncurrent assets (including goodwill recognized in purchase) Current liabilities Long-term liabilities Net assets $410,000 2,060,000 (700,000) (500,000) It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,455,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2020, Conchita reports the following balance sheet…On May 31, 2020, Roddick Company paid $3,400,000 to acquire all of the ordinary shares of Bolt Corporation, which became a division of Roddick. Bolt reported the following statement of financial position at the time of the acquisition: Equity $2,500,000 Non-current assets $2,700,000 Non-current liabilities 500,000 Current assets 900,000 Current liabilities 600,000 Total assets $3,600,000 Total equity and liabilities $3,600,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Bolt was $2,800,000. On December 31, 2020, Bolt reports the following statement of financial position information: Current assets $ 800,000 Non-current assets (including goodwill recognized in purchase) 2,400,000 Current liabilities (700,000) Non-current liabilities (500,000) Net assets $2,000,000 It is determined that the recoverable amount value of the Bolt…
- On July 31, 2020, Mexico Company paid $3,000,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Mexico. Conchita reported the following balance sheet at the time of the acquisition. Current assets $ 800,000 Current liabilities $ 600,000 Noncurrent assets 2,700,000 Long-term liabilities 500,000 Total assets $3,500,000 Stockholders' equity 2,400,000 Total liabilities and stockholders' equity $3,500,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,750,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2020, Conchita reports the following balance sheet information. Current assets $ 450,000 Noncurrent assets (including goodwill recognized in purchase)…On July 1, 2022 the ABC Company acquired the net assets of XYZ Company for P8,000,000. The recorded assets and liabilities of XYZ Corporation on July 1, 2022, immediately before the acquisition are as follows: Cash P 800,000 Inventory 2,400,000 Property and equipment, net 4,800,000 Liabilities 1,800,000 On July 1, 2022 it was determined that the inventory of XYZ had a fair value of P1,900,000, and the property and equipment, net had a fair value of P5,600,000. What is the amount of goodwill (gain on bargain purchase) that will be reported in the books of ABC?On 1 July 2020, Big Ltd acquired all the issued share capital of Small Ltd for cash for an amount of $1,050,000. On the date of the acquisition, the statements of the financial position of both entities are as follows: Big Ltd ($) Small Ltd ($) Assets Cash 21,000 10,500 Accounts receivable 315,000 115,500 Land 420,000 210,000 Plant 1,680,000 1,050,000 Investment in Small Ltd 1,050,000 3,486,000 1,386,000 Liabilities Accounts payable 126,000 63,000 Loans payable 840,000 315,000 Shareholders’ equity Share capital 2,100,000 420,000 Retained earnings 420,000 588,000 3,486,000 1,386,000 Required: a.Calculate the goodwill on acquisition assuming all net assets of small Ltd are recorded in fair value. b.Prepare consolidation journal entries. c.
- On July 31, 2020, Ivanhoe Company paid $3,000,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Ivanhoe. Conchita reported the following balance sheet at the time of the acquisition. Current assets $750,000 Current liabilities $500,000 Noncurrent assets 2,700,000 Long-term liabilities 400,000 Total assets $3,450,000 Stockholders’ equity 2,550,000 Total liabilities and stockholders’ equity $3,450,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,755,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2020, Conchita reports the following balance sheet information. Current assets $480,000 Noncurrent assets…On May 31, 2021, Ivanhoe Company paid $3,640,000 to acquire all of the common stock of Oriole Corporation, which became a division of Ivanhoe. Oriole reported the following balance sheet at the time of the acquisition: Current assets $ 936,000 Current liabilities $ 624,000 Noncurrent assets 2,808,000 Long-term liabilities 520,000 Stockholder's equity 2,600,000 Total assets $3,744,000 Total liabilities and stockholder's equity $3,744,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Oriole was $3,224,000. At December 31, 2021, Oriole reports the following balance sheet information: Current assets $ 832,000 Noncurrent assets (including goodwill recognized in purchase) 2,496,000 Current liabilities (728,000 ) Long-term liabilities (520,000 ) Net assets $2,080,000 It is determined that the fair value of the Oriole division is $2,288,000. 1).…On January 1, 2020, West Corporation purchased 80% of the common stocks of Fast Company. Separate balance sheets for the companies at acquisition date are as follows: West Corp Fast Co. FMV Cash P 12,000 P 119,000 Accounts recei vable 72,000 13,000 Inventory 66,000 19,000 29,000 230,000 120,000 140,000 Plant assets, net (remalning life 5 years) Investment In Fast 196.000 Total assets P 615,000 P 271,000 Accounts payable P103,000 71,000 Capital stock 400,000 150,000 Retained earnings 112,000 50,000 Total equities P 615,000 P 271,000 20. Goodwill (income) to be recorded by West Corp. oints 21. Total assets on the consolidated balance sheet nts 22. Non-controlling interest in net assets as of January, 2020
- On January 1, 2020, HND Industrial Products Company acquired 400,000 shares at $ 50 per share of XYZ Cables Company, which represents 20% ownership. Required Record the following transactions in the books of HND Industrial Products Company. (assuming there is significant influence and insignificant influence) (a) Record the acquisition entry done by HND Company on January 1, 2020 (b) The XYZ Cables had reported net income of $ 800,000 for the year 2020 (c) XYZ cables announced and paid cash dividends of $ 200,000, (d) On December 31, 2020, XYZ Cables shares have been valued at $ 52 per share, and HND still owns 400,000 shares On December 31, 2021, XYZ Cables shares would be valued at $ 51 per share, and HND Company will own 400,000 sharesTop Corporation acquired 100% of Sun Corporation’s common stock on December 31,2019. Balance sheet data for the two companies immediately following the acquisition TOP SUN Cash $ 49,000 $ 30,000 Accounts Receivable 110,000 45,000 Inventory 130,000 70,000 Land 80,000 25,000 Buildings & Equipment 277,000 235,000 Investment in Sun Corporation 198,000 Total Assets $844,000 $405,000 Accounts Payable $ 61,500 $ 28,000 Taxes Payable 95,000 37,000 Bonds Payable 280,000…Top Corporation acquired 100% of Sun Corporation’s common stock on December 31,2019. Balance sheet data for the two companies immediately following the acquisition TOP SUN Cash $ 49,000 $ 30,000 Accounts Receivable 110,000 45,000 Inventory 130,000 70,000 Land 80,000 25,000 Buildings & Equipment 277,000 235,000 Investment in Sun Corporation 198,000 Total Assets $844,000 $405,000 Accounts Payable $ 61,500 $ 28,000 Taxes Payable 95,000 37,000 Bonds Payable 280,000…