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Conduct an acquisition analysis for Bermuda Purchase Consideration [ Choose ] Net Identifiable Assets (Hint: E = A- L) [ Choose ] Business Combination Valuation Reserve [Choose ) Goodwill/ (Bargain Purchase) [ Choose )

Conduct an acquisition analysis for Bermuda Purchase Consideration [ Choose ] Net Identifiable Assets (Hint: E = A- L) [ Choose ] Business Combination Valuation Reserve [Choose ) Goodwill/ (Bargain Purchase) [ Choose )

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On 1 November 2020, Bermuda Ltd acquired all the assets and fiabilities (other than cash) of Triangle Ltd. The details on the assets and liabilities of Triangle Ltd were as follows: Carrying Fair Value Amount Cash 30,000 30,000 Equipment 120,000 140,000 Accounts Receivable 25,000 25,000 Furniture 35,000 25,000 Accounts Payable 10,000 10,000 Income tax 19,000 19,000 Payable Annual Leave 14,000 14,000 Payable In addition to the above items Triangle Ltd had an internally generated brand name with a fair value of $75,000 that was not recognised in its accounts. The consideration Bermuda Ltd paid to Triangle Ltd was $80,000 cash and 20,000 shares. The fair value of each Bermuda Ltd share is $10. Bermuda Ltd paid $20,000 in acquisition to ic 30%
Transcribed Image Text:On 1 November 2020, Bermuda Ltd acquired all the assets and fiabilities (other than cash) of Triangle Ltd. The details on the assets and liabilities of Triangle Ltd were as follows: Carrying Fair Value Amount Cash 30,000 30,000 Equipment 120,000 140,000 Accounts Receivable 25,000 25,000 Furniture 35,000 25,000 Accounts Payable 10,000 10,000 Income tax 19,000 19,000 Payable Annual Leave 14,000 14,000 Payable In addition to the above items Triangle Ltd had an internally generated brand name with a fair value of $75,000 that was not recognised in its accounts. The consideration Bermuda Ltd paid to Triangle Ltd was $80,000 cash and 20,000 shares. The fair value of each Bermuda Ltd share is $10. Bermuda Ltd paid $20,000 in acquisition to ic 30%
In addition to the above items Triangle Ltd had an internally generated brand name with a fair value of $75,000 that was not recognised in its accounts. The consideration Bermuda Ltd paid to Triangle Ltd was $80,000 cash and 20,000 shares. The fair value of each Bermuda Ltd share is $10. Bermuda Ltd paid $20,000 in acquisition related costs. Tax rate is 30%. Required: Conduct an acquisition analysis for Bermuda Purchase Consideration [ Choose ) Net Identifiable Assets (Hint: E= A- L) [ Choose ) Business Combination Valuation Reserve [ Choose) Goodwill/ (Bargain Purchase) [ Choose ] >
Transcribed Image Text:In addition to the above items Triangle Ltd had an internally generated brand name with a fair value of $75,000 that was not recognised in its accounts. The consideration Bermuda Ltd paid to Triangle Ltd was $80,000 cash and 20,000 shares. The fair value of each Bermuda Ltd share is $10. Bermuda Ltd paid $20,000 in acquisition related costs. Tax rate is 30%. Required: Conduct an acquisition analysis for Bermuda Purchase Consideration [ Choose ) Net Identifiable Assets (Hint: E= A- L) [ Choose ) Business Combination Valuation Reserve [ Choose) Goodwill/ (Bargain Purchase) [ Choose ] >
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