B6. Halwell Motor Company acquires all of the stock of Ornex Auto Services for $96,000,000 in cash. The books of Ornex report thefollowing account balances at the date of acquisition (in trial balance format). Date-of-acquisition fair values are also displayed.Current assetsProperty, netLiabilitiesCapital stockRetained earningsTotalSelect one:Book Value Dr (Cr) Fair Value Dr (Cr)$1,600,000$1,040,00094,400,00064,000,000(56,000,000)$(57,600,000)(16,000,000)(24,000,000)Ornex has no previously unrecorded identifiable intangibles.On the consolidation working paper, eliminating entry (R)OOO$0a. credits Investment in Ornex by $40,000,000b. debits capital stock by $16,000,000c. debits goodwill by $88,560,000d. debits current assets by $560,000

The goodwill is calculated by taking the difference of cash paid for acquisition and the assets…

Halwell Motor Company acquires all of the stock of Ornex Auto Services for $96,000,000 in cash. The books of Ornex report the following account balances at the date of acquisition (in trial balance format). Date-of-acquisition fair values are also displayed.

Halwell Motor Company acquires all of the stock of Ornex Auto Services for $96,000,000 in cash. The books of Ornex report the following account balances at the date of acquisition (in trial balance format). Date-of-acquisition fair values are also displayed.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 44P

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