In a pre-2009 business combination, Acme Company acquired all of Brem Company's assets and liabilities for cash. After the combination, Acme formally dissolved Brem. At the acquisition date, the following book and fair values were available for the Brem Company accounts: Items Book Values Fair Values Current assets $ 88,200 $88,200 Equipment 131,000 198,000 Trademark Liabilities 352,000 (74,200) (74,200) (100,000) (45,000) Common stock Retained earnings In addition, Acme paid an investment bank $30,900 cash for assistance in arranging the combination. Required: a. Using the legacy purchase method for pre-2009 business combinations, prepare Acme's entry to record its acquisition of Brem in its accounting records assuming the cash amounts of $651,900 and $446,300 were paid to the former owners of Brem b. How would these journal entries change if the acquisition occurred post-2009 and therefore Acme applied the acquisition method? Record the acquisition of Brem using the purchase method assuming $446,300 was paid to the former owners of Brem. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
In a pre-2009 business combination, Acme Company acquired all of Brem Company's assets and liabilities for cash. After the combination, Acme formally dissolved Brem. At the acquisition date, the following book and fair values were available for the Brem Company accounts: Items Book Values Fair Values Current assets $ 88,200 $88,200 Equipment 131,000 198,000 Trademark Liabilities 352,000 (74,200) (74,200) (100,000) (45,000) Common stock Retained earnings In addition, Acme paid an investment bank $30,900 cash for assistance in arranging the combination. Required: a. Using the legacy purchase method for pre-2009 business combinations, prepare Acme's entry to record its acquisition of Brem in its accounting records assuming the cash amounts of $651,900 and $446,300 were paid to the former owners of Brem b. How would these journal entries change if the acquisition occurred post-2009 and therefore Acme applied the acquisition method? Record the acquisition of Brem using the purchase method assuming $446,300 was paid to the former owners of Brem. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:In a pre-2009 business combination, Acme Company acquired all of Brem Company's assets and liabilities
for cash. After the combination, Acme formally dissolved Brem. At the acquisition date, the following book
and fair values were available for the Brem Company accounts:
Items
Book Values Fair Values
Current assets
$ 88,200
$88,200
Equipment
131,000
198,000
Trademark
Liabilities
352,000
(74,200)
(74,200)
(100,000)
(45,000)
Common stock
Retained earnings
In addition, Acme paid an investment bank $30,900 cash for assistance in arranging the combination.
Required:
a. Using the legacy purchase method for pre-2009 business combinations, prepare Acme's entry to record
its acquisition of Brem in its accounting records assuming the cash amounts of $651,900 and $446,300
were paid to the former owners of Brem
b. How would these journal entries change if the acquisition occurred post-2009 and therefore Acme
applied the acquisition method?
Record the acquisition of Brem using the
purchase method assuming $446,300 was
paid to the former owners of Brem.
Note: If no entry is required for a transaction/event, select
"No journal entry required" in the first account field.
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