Exercise 1-19 (Static) Computation of Fair Value LO 1-5 Prant Company acquired all of Sedford Corporation's assets and liabilities on January 1, 20X2, in a business combination. At that date, Sedford reported assets with a book value of $624,000 and liabilities of $356,000. Prant noted that Sedford had $40,000 of capitalized research and development costs on its books at the acquisition date that did not appear to be of value. Prant also determined that patents developed by Sedford had a fair value of $120,000 but had not been recorded by Sedford. Except for buildings and equipment, Prant determined the fair value of all other assets and liabilities reported by Sedford approximated the recorded amounts. In recording the transfer of assets and liabilities to its books, Prant recorded goodwill of $93,000. Prant paid $517,000 to acquire Sedford's assets and liabilities. If the book value of Sedford's buildings and equipment was $341,000 at the date of acquisition, what was their fair value? Fair value of buildings and equipment

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Exercise 1-19 (Static) Computation of Fair Value LO 1-5
Prant Company acquired all of Sedford Corporation's assets and liabilities on January 1, 20X2, in a business combination. At that date,
Sedford reported assets with a book value of $624,000 and liabilities of $356,000. Prant noted that Sedford had $40,000 of
capitalized research and development costs on its books at the acquisition date that did not appear to be of value. Prant also
determined that patents developed by Sedford had a fair value of $120,000 but had not been recorded by Sedford. Except for
buildings and equipment, Prant determined the fair value of all other assets and liabilities reported by Sedford approximated the
recorded amounts. In recording the transfer of assets and liabilities to its books, Prant recorded goodwill of $93,000. Prant paid
$517,000 to acquire Sedford's assets and liabilities. If the book value of Sedford's buildings and equipment was $341,000 at the date
of acquisition, what was their fair value?
Fair value of buildings and equipment
Transcribed Image Text:Exercise 1-19 (Static) Computation of Fair Value LO 1-5 Prant Company acquired all of Sedford Corporation's assets and liabilities on January 1, 20X2, in a business combination. At that date, Sedford reported assets with a book value of $624,000 and liabilities of $356,000. Prant noted that Sedford had $40,000 of capitalized research and development costs on its books at the acquisition date that did not appear to be of value. Prant also determined that patents developed by Sedford had a fair value of $120,000 but had not been recorded by Sedford. Except for buildings and equipment, Prant determined the fair value of all other assets and liabilities reported by Sedford approximated the recorded amounts. In recording the transfer of assets and liabilities to its books, Prant recorded goodwill of $93,000. Prant paid $517,000 to acquire Sedford's assets and liabilities. If the book value of Sedford's buildings and equipment was $341,000 at the date of acquisition, what was their fair value? Fair value of buildings and equipment
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Consolidations
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education