Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $33,000,000 in cashThe book values and fair values of Iceberg's assets and liabilities were as follows:Current assetsProperty, plant, and equipmentOther assetsCurrent liabilitiesLong-term liabilities.Required:Book Value$ 12,800,00026,800,000Fair Value$ 15,800,00032,800,0004,400,0005,400,0008,800,00016,200,0008,800,00015,200,000Calculate 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 arises in a business acquisition when the consideration transferred is greater than the…

Answered: Mainline Produce Corporation acquired…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 37RQSC

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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: Book Value Fair ValueCurrent assets $11,400,000 $ 14,400,000Property, plant, and equipment 20,200,000 26,200,000Other assets 3,400,000 4,400,000Current liabilities 7,800,000 7,800,000Long-term liabilities 13,200,000 12,200,000Required:Calculate the amount paid for goodwill.
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 Value Fair Value $ 12,000,000 $ 15,000,000 21,400,000 3,600,000 8,000,000 14,000,000 Current assets Property, plant, and equipment Other assets 27,400,000 4,600,000 8,000,000 13,000,000 Current liabilities Long-term liabilities Required: 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
New Harvest Bakery acquired all the outstanding common stock of Red Rock Bakery for $72,800 in cash. The book values and fair values of Red Rock's assets and liabilities were as follows: Book Value Fair Value Current assets Property, plant, and equipment Other assets Current liabilities Long-term liabilities $25,100 43,900 4,900 18,000 25,600 $23,900 50,400 5,700 14,600 20,500 Calculate the amount paid for goodwill. Goodwill
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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.
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Cars Led acquired 65%, of Trucks Ltd for a cost of 5650,000, when the squty of Trucks LadcOnSistad ofShare Capitalgeneral ReserveRetained Eamings$210.000300,000$80,000All the identifiable assets and liabilities of Cars Ltd were recorded at fair value except forfollowinoVehicles (cost $550.000)EquipmentCarryingAmount$450,000$80,000FairValue$490,000$90,000Required:Prepare the journal entries for the pre-acquisition stage (i.e., Stage 1) of recording the pre-acquisition elimination and Non-Controlling Interest both using the partial goodwill method
High Company purchased for cash at P5,0 per share ll 150,000 ordinary shares outstanding of another entity. The statement of financial position of the acquiree on the date of acquisition showed net assets with a carrying amount of P6,000,000. The fair value of property, plant, and equipment on same date was P800,000 in excess of carrying amount. What amount should be recorded as goodwill on the date of purchase? a. 1,500,000 b. 800,000 700,000 d. с.
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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)…
Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $11,000,000 in cash. The book value of Smith’s net assets (assets minus liabilities) was $7,800,000. The fair values of all of Smith’s assets and liabilities were equal to their book values with the following exceptions: Book Value Fair ValueReceivables $ 1,300,000 $1,100,000Property, plant, and equipment 8,000,000 9,400,000Intangible assets 200,000 1,200,000 Required:Calculate the amount paid for goodwill.

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