Problem 3) On January 1, 20X7, Falcon acquired the net assets of Intra for $3,400,000 with theissue of shares. The statement of financial position for Intra at the date of acquisition is shownbelow, together with estimates of the fair values of Intra's recorded assets and liabilities.Intra CorpStatement of Financial Position as at December 31, 20X6AssetsCashAccounts receivableInventoriesProperty, plant, andequipmentDevelopment projectsOther investmentsTotal assetsLiabilitiesAccounts payable andaccrued liabilitiesLong-term debtCommon sharesRetained earningsTotal liabilities andshareholders' equityBook value$ 000's3501803303,465150204,4951806801,5252,1104,495Fair value$ 000's3501703103,15556545180660Required:a) What is the amount of goodwill to be recorded for this business combination?b) Prepare the journal entry that Falcon will use to record the business combination. Preparethe statement of financial position for Intra on January 1, 20X7, directly after thetransaction is completed.

The question deals with business combinations. When a business is acquired, the net assets are…

Intra Corp Financial Position as at December 31, 20X6 Fair value $ 000's ble nd ects : and nd ty Book value $ 000's 350 180 330 3,465 150 20 4.495 180 680 1,525 2,110 4,495 350 170 310 3,155 565 45 180 660 e amount of goodwill to be recorded for this business combination? journal entry that Falcon will use to record the business combination. Prepar ent of financial position for Intra on January 1, 20X7, directly after the is completed.

Intra Corp Financial Position as at December 31, 20X6 Fair value $ 000's ble nd ects : and nd ty Book value $ 000's 350 180 330 3,465 150 20 4.495 180 680 1,525 2,110 4,495 350 170 310 3,155 565 45 180 660 e amount of goodwill to be recorded for this business combination? journal entry that Falcon will use to record the business combination. Prepar ent of financial position for Intra on January 1, 20X7, directly after the is completed.

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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