Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $32,000,000 in cash.The book values and fair values of Iceberg's assets and liabilities were as follows:Book ValueFair Value$ 12,000,000 $ 15,000,00021,400,0003,600,0008,000,00014,000,000Current assetsProperty, plant, and equipmentOther assets27,400,0004,600,0008,000,00013,000,000Current liabilitiesLong-term liabilitiesRequired:Calculate the amount paid for goodwill. (Enter your answer in millions (i.e. 5,000,000 should be entered as 5).)Amount paid for goodwillmillion

Goodwill: Goodwill is the good reputation developed by a company over years. This is recorded as an…

Answered: Mainline Produce Corporation acquired…

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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SFFN Corp. purchased the entire business of AZC, Inc. including all its assets and liabilities for $1,800,000. Below is information related to the two companies: SFFN AZC Fair value of assets $ 3,050,000 $ 1,600,000 Fair value of liabilities 2,575,000 800,000 Reported assets 2,800,000 1,400,000 Reported liabilities 2,500,000 750,000 Net Income for the year 460,000 250,000 How much goodwill will SFFN recognize as a result of its acquisition of AZC? Select one: a. $-0- b. $1,225,000 c. $1,150,000 d. $200,000 e. $1,000,000
Peace Computer Corporation acquired 75 percent of Symbol Software Company’s stock on January 2, 20X3, by issuing bonds with a par value of $85,250 and a fair value of $102,750 in exchange for the shares. Summarized balance sheet data presented for the companies just before the acquisition follow: Peace Computer Corporation Symbol Software Company Book Value Fair Value Book Value Fair Value Cash $ 216,000 $ 216,000 $ 62,000 $ 62,000 Other Assets 406,000 406,000 137,000 137,000 Total Debits $ 622,000 $ 199,000 Current Liabilities $ 82,000 82,000 $ 62,000 62,000 Common Stock 290,000 62,000 Retained Earnings 250,000 75,000 Total Credits $ 622,000 $ 199,000 Required: Prepare a consolidated balance sheet immediately following the acquisition.
People Co. acquired 80% of Steeple Co.'s common stock for $10,000,000 in cash on Jan. 2, 20x1. At that date, Steeple's 56,000,000 of net assets were fairly stated, except for an unrecorded intangible asset, favorable leases, with a $1,000,000 value (useful life of 10 years, straight-line amortization). The estimated fair value of the noncontrolling interests at the acquisition date was $2,000,000. People Co. accounts for its investment in Steeple Co. using the equity method. There are no intra-entity transactions and both firms are in the U.S.A It is now December 31, 20x3. Steeple reported net income of $250,000 for the current year, and declared and paid $40,000 in dividends. There were no impairments of Steeple's assets in 20x1, 20x2 or but goodwill is impaired by $100,000 in 20x3. Show consolidating entry R (relates to recognizing revalued assets and liabilities) that would be needed to present consolidated financial statements for 20x3.
26. Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $13,280,000 in cash. The book value of Smith’s net assets (assets minus liabilities) was $9,700,000. The fair values of all of Smith’s assets and liabilities were equal to their book values with the following exceptions: Book Value Fair Value Receivables $ 3,200,000 $ 2,810,000 Property, plant, and equipment 9,900,000 11,490,000 Intangible assets 390,000 1,580,000 Required:Calculate the amount paid for goodwill.
7. ABC Corporation acquired 70 percent of XYZ Corporation on August 1 for P420,000. On that date, XYZ Corporation had the following book values and market values. What is the amount of non-controlling interest on the acquisition date consolidated balance sheet?
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 Current liabilities Book Value $ 10,200,000 21,000,000 1,800,000 7,200,000 11,800,000 Fair Value $ 13,200,000 Other assets Long-term liabilities Required: 27,000,000 2,800,000 7,200,000 10,800,000 Calculate the amount paid for goodwill. (Enter your answer in millions (i.e. 5,000,000 should be entered as 5).) Amount paid for goodwill million
Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisitior fair value of the noncontrolling Interest was equal to 25 percent of Saul's book value. The balance sheets of the two companies fc January 1, 20X1, are as follows: Cash Accounts Receivable. Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Saul Corporation Total Assets PENNY MANUFACTURING COMPANY Balance Sheet January 1, 20x1 Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Total Assets $ 231,500 Accounts Payable 75,000 Bonds Payable. 113,000 Common Stock 618,000 Additional Paid-In Capital (139,000) Retained Earnings 233,250 $ 1,131,758 Total Liabilities and Equities $ 159,750 380,000 181,000 31,000 380,000 $ 1,131,750 SAUL CORPORATION Balance Sheet January 1, 20x1 $ 61,000 Accounts Payable 115,000 Bonds Payable 193,000 Common Stock ($10 par) 618,000 Additional Paid-In Capital (239,000)…
Use the following information for question 6 and 7: Marksman acquired 100 percent of Tribal Transit for P275,000. At the date of acquisition, Fast Transit had the following book and market values: Book Value Market Value Cash and Receivables P30,000 P30.000 Inventory 100,000 120,000 Plant Assets (net) 210,000 300,000 Current Liabilities (45,000) (45,000) Long-term Debt (115,000) (115,000) Common Stock (10,000) Retained Earnings (170,000) 6. What is the amount of the "Investment in Tribal Transit" account on Marksman's financial records at the acquisition date? 7. What amount of pre-acquisition earnings is eliminated in the acquisition date worksheet elimination?
Item Cash Pie Corporation acquired 75 percent of slice Company's ownership on January 1, 20X8, for $96,000. At that date, the fair value of the noncontrolling interest was $32,000. The book value of slice's net assets at acquisition was $92,000. The book values and fair values of Slice's assets and liabilities were equall, except for Slice's buildings and equipment, which were worth $18,400 more than book value. Accumulated depreciation on the buildings and equipment was $24,000 on the acquisition date. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Pie concluded at December 31, 20Xx8, that goodwill from its purchase of Slice shares had been impaired and the correct carrying amount was $2,600. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. Trial balance data for Pie and Slice on December 31, 20X8, are as follows: Prepare a three-part consolidation…
Northern Equipment Corporation purchased all the outstanding common stock of Pioneer Equipment Rental for $5,600,000 in cash. The book values and fair values of Pioneer’s assets and liabilities were Book Value Fair ValueAccounts Receivable $ 750,000 $ 650,000Buildings 4,100,000 4,800,000Equipment 110,000 200,000Accounts Payable (750,000) (750,000)Net assets $ 4,210,000 $ 4,900,000Required:1. Calculate the amount Northern Equipment should report for goodwill.2. Record Northern Equipment’s acquisition of Pioneer Equipment Rental.
ABC Corporation acquired 70 percent of XYZ Corporation on August 1 for P420,000. On that date, XYZ Corporation had the following book values and market values. What is the amount of purchase differential recognized on the acquisition date consolidated balance sheet with respect to plant assets. * Book Value P40,000 170,000 Market Value P40,000 230,000 700,000 Cash Inventory Plant Assets (net) Cost of Goods Sold 620,000 220,000| 60,000 Depreciation Expense Liabilities Common Stock (300,000) (10,000) (450,000) (350,000) (300,000) Retained Earnings Sales Your answer
Sagar

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