Current Attempt in Progress PLTO Ltd. is considering purchasing the net assets of Flint Corporation. Following is the statement of financial position of Flint as at December 31, 2023: Flint Corporation Statement of Financial Position As at December 31, 2023 Current assets Buildings and equipment Accumulated depreciation Land Total assets Current liabilities Common shares Retained earnings Total equities Current assets Building and equipment Land Current liabilities $237,400 760,000 (110,000) 179,000 Value of goodwill $1,066,400 Following are the fair values for Flint's net assets, as at December 31, 2023: S $200,000 580,000 286,400 $1,066,400 $230,900 492,800 320,200 Calculate the value of goodwill that would be acquired by PLTO if it offered $2,109,600 for the net assets of Flint. (179,300) $864,600

Current Attempt in Progress PLTO Ltd. is considering purchasing the net assets of Flint Corporation. Following is the statement of financial position of Flint as at December 31, 2023: Flint Corporation Statement of Financial Position As at December 31, 2023 Current assets Buildings and equipment Accumulated depreciation Land Total assets Current liabilities Common shares Retained earnings Total equities Current assets Building and equipment Land Current liabilities $237,400 760,000 (110,000) 179,000 Value of goodwill $1,066,400 Following are the fair values for Flint's net assets, as at December 31, 2023: S $200,000 580,000 286,400 $1,066,400 $230,900 492,800 320,200 Calculate the value of goodwill that would be acquired by PLTO if it offered $2,109,600 for the net assets of Flint. (179,300) $864,600

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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Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $30,000,000 in cash. The book values and fair values of Iceberg's assets and liabilities were as follows: Current assets Property, plant, and equipment Other assets Current liabilities Long-term liabilities Required: 1. Calculate the amount paid for goodwill. 2. Determine the financial statement effects of the acquisition. Required 1 Required 2 Complete this question by entering your answers in the tabs below. Book Value $ 11,400,000 20,200,000 3,400,000 7,800,000 13,200,000 Assets Determine the financial statement effects of the acquisition. Note: Amounts to be deducted should be indicated with a minus sign. Enter your answer in millions rounded to 1 decimal place. (i.e. 5,500,000 should be entered as 5.5). Accounts Payable Accounts Receivable Accumulated Depreciation Advertising Expense Fair Value $ 14,400,000 26,200,000 4,400,000 7,800,000 12,200,000 Balance Sheet Liabilities…
Action, Inc. acquired the following assets and assumed the related liabilities of Slacker Corp. in a transaction completed on February 16, 2023: Accounts receivable, net Inventories Property, plant & equipment Non-amortizable intangible assets Carrying value for Slacker Current liabilities Noncurrent liabilities $ 11,000 $ 50,000 $ 100,000 $ 200,000 Fair Value $ 10,000 $ 50,000 $ 150,000 $ 225,000 $ (40,000) $(200,000) $ (40,000) $(200,000) Action paid $205,000 in cash for all of the above from Slacker. a) Determine if Action must record any goodwill. Show any calculations. b) Record the acquisition in Action's general journal on Feb. 16, 2023. Show: any calculations. c) Prepare any adjusting entry for amortization required as of the fiscal year end, December 31, 2023. If no amortization is required, explain why.
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ACME Co. paid $110,000 for the net assets of Comb Corp. At the time of the acquisition the following information was available related to Comb's balance sheet: Book Value Fair Value Current Assets $50,000 $ 50,000 Building 80,000 100,000 Equipment 40,000 50,000 Liabilities 30,000 30,000 What is the amount recorded by ACME for the Building? a. $110,000 b. $20,000 c. $80,000 d. $100,000
Intangibles: Balance Sheet Presentation and Income Statement Effects Clinton Company has provided information on intangible assets as follows: A patent was purchased from Lou Company for $1,680,000 on January 1, 2018. Clinton estimated the remaining useful life of the patent to be 10 years. The patent was carried in Lou's accounting records at a net book value of $1,440,000 when Lou sold it to Clinton. During 2019, a franchise was purchased from Rink Company for $500,000. In addition, 6% of revenue from the franchise must be paid to Rink. Revenue from the franchise for 2019 was $1,800,000. Clinton estimates the useful life of the franchise to be 10 years and takes a full year's amortization in the year of purchase. Clinton incurred R&D costs in 2019 as follows: Materials and equipment $125,000 Personnel 162,000 Indirect costs 78,000 $365,000 Clinton estimates that these costs will be recouped by December 31, 2020. On January 1, 2019, Clinton estimates, based on new…
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