What is the amount of goodwill? On April 1, 20X3, Bennett Company paid $1,200,000 for all ofTyler Corporation's issued and outstanding common stock.Tyler's recorded assets and liabilities on April 1, 20X3, were asfollows:AccountCashInventoryAmount$120,000$300,000Property & equipment (net of accumulated $700,000depreciation of $200,000)Liabilities$250,000On April 1, 20X3, Tyler's inventory was determined to have afair value of $350,000, and the property and equipment had afair value of $800,000. What is the amount of goodwill resultingfrom the business combination?

Explanation of Goodwill:Goodwill is an intangible asset that represents the excess amount paid by an…

Answered: On April 1, 20X3, Bennett Company paid…

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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3. On April 1, 20X2, Pack Company paid $800,000 for all of Sack Corporation's issued and outstanding common stock Sack's recorded assets and liabilities on April 1, 20X2, were as follows: $ 80,000 240,000 Cash Inventory Property and equipment (net of accumulated depreciation of $320,000) Liabilities On April 1, 20X2, Sack's inventory was determined to have a fair value of $190.000, and the property and equipment had a fair value of $560.000. What is the amount of goodwill resulting from the business combination? Multiple Choice $180.000. $0. $50,000 480,000 (180,000) $150.000.
PayNet Inc. (PayNet) and Shale Ltd. (Shale) had the following balance sheets on July 31, 2022:
None
The statement of financial position of Weatherly Unlimited (Pty) Ltd is presented below: Statement of FinancialPosition as at 28 February 2022 R Non - current assets 1 850 000 Property, plant and equipment 1.850 000Current assets 1 250 000 Inventory 480 000 Trade receivables 350 000 Cash and cash equivalents 420 000TOTAL ASSETS 3 100 000 EQUITY 1 850 000 Ordinary share capital 1 000 000 Distributable reserves 850 000Non - current liabilities 650 000 Long-term loan 650 000 Current liabilities 600 000 Trade payables 545 000Short-term portion of long-term loan 55 000 TOTAL LIABILITIES 1 250 000 TOTAL EQUITY AND LIABILITIES3 100 000 Additional information: The company plans to increase its sales by 10% in the following year. Current annual sales total R2 500 000. After tax profit margin is 5% and half of the profits is retained within the company. All sales are currently made on credit and in future, sales will remain on credit. What is the additional working capital required to support…
Sandy Corporation’s balance sheet at January 2, 20x5 is as follows:Sandy-Dr(Cr)Cash and receivables P200,000,000Inventories 600,000,000.00Property, plant and equipment, net 7,500,000,000.00 Current liabilities (400,000,000.00)Long-term debt (7,200,000,000.00)Capital stock (7,200,000.00)Retained earnings (25,000,000.00)Accumulated othercomprehensive income (5,000,000.00) An analysis of Sandy’s assets and liabilities reveals that book values of some reported itemsdo not reflect their market values at the date of acquisition:● Inventories are overvalued by P200,000,000● Property, plant and equipment is overvalued by P2,000,000,000● Long-term debt is undervalued by P100,000,000 On January 2, 20x5, Velasco issues new stock with a market value of P700,000,000 toacquire the assets and liabilities of Sandy. Stock registration fees are P100,000,000, paid incash. Consulting, accounting, and legal fees connected with the merger are P150,000,000,paid in cash. In addition, Velasco enters into an…
The separate condensed balance sheets of Patrick Corporation and its wholly-owned subsidiary, Sean Corporation, are as follows: Cash Accounts receivable (net) Inventories BALANCE SHEETS December 31, 2020 Plant and equipment (net) Investment in Sean Total assets Accounts payable Long-term debt Common stock ($10 par) Additional paid-in capital Retained earnings Total liabilities and shareholders' equity Additional Information: Patrick 76,000 148,000 96,000 632,000 462,000 $1,414,000 $ Sean $ 56,000 24,000 80,000 270,000 $430,000 98,000 22,000 66,000 8,000 832,000 236,000 $1,414,000 $ 430,000 142,000 110,000 330,000 • On December 31, 2020, Patrick acquired 100 percent of Sean's voting stock in exchange for $462,000. • At the acquisition date, the fair values of Sean's assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Sean's inventory were $20,000 more than their carrying amounts. In the December 31, 2020, consolidated…
A Company provided the following data for the current year: Gain on sale of equipment – P60,000; Proceeds from sale of equipment – P100,000; Purchase of bonds with P2,000,000 face value – P1,800,000; Amortization of bond discount – P20,000; Dividends declared – P450,000; Dividends paid – P380,000; Proceeds from sale of treasury shares (at cost P650,000) – P750,000 What amount should be reported as net cash used in investing activities? [A] 1,700,000 [B] 1,760,000 [C] 1,880,000 [D] 1,940,000
Prior to subscription of Color, the accounting equation of Rado’s corporation is:Asset=Liabilities+Equity P1,000,000 P 250,000 P 750,000 Color subscribed 2,500 shares at P100 par that will be due and collectible 18 months from December 31, 200B, the balance sheet date of Rado. After subscription of Color, the accounting equation of Rado would be Total AssetsTotal LiabilitiesStockholders equity a.P1,250,000P250,000P1,000,000 b.P1,250,000P500,000P 750,000 c.P1,000,000P250,000P 750,000 d.P1,000,000P500,000P 750000
Plug Corporation holds 80 percent of Socket Company's common stock. The following balance sheet data are presented for December 31, 20X7: Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Socket Company Total Assets Liabilities and Equities Accounts Payable Bonds Payable Preferred Stock ($100 par value) Common Stock ($10 par value) Retained Earnings Total Liabilities and Equities Plug Corporation $ 100,000 150,000 300,000 100,000 2,250,000 Basic earnings per share Diluted earnings per share (850,000) 600,000 $2,650,000 $ 200,000 800,000 1,000,000 650,000 $2,650,000 $ Socket Company 90,000 220,000 300,000 290,000 900,000 (250,000) $1,550,000 $ 100,000 500,000 200,000 400,000 350,000 $1,550,000 Socket reported net income of $115,000 in 20X7 and paid dividends of $60,000. Its bonds have an annual interest rate of 8 percent and are convertible into 30,000 common shares. Its preferred shares pay an 11 percent annual dividend…
how much is the book value?
Matthews Company obtained all of the common stock of Jackson Company on January 1, 20X1. As of that date, Jackson had the following trial balance: Debit Credit Totals $720,000 $720,000 Accounts Payable $60,000 Accounts Receivable $50,000 Additional Paid-in Capital $60,000 Buildings, net (10-year life) $140,000 Cash $70,000 Common Stock $300,000 Equipment, net (8-year life) $240,000 Inventory $110,000 Land $90,000 Long-term Liabilities $180,000 Retained Earnings $120,000 Supplies $20,000 Any excess of cost over fair value is due to an unamortized patent (NOT goodwill) to be amortized over 10 years. During 20X1, Jackson reported net income of $96,000 while paying dividends of $12,000. During 20X2, Jackson reported net income of $132,000 while paying $36,000 in dividends. Assume that Matthews Co. acquired Jackson Co.’s common stock for $588,000 in cash. As of January 1, 20X1, Jackson’s land had a fair market value of $102,000, its buildings were valued at $188,000, and its equipment…
The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2024: Accounts Revenues Cost of goods sold Depreciation expense Investment income Dividends declared Retained earnings, 1/1/24 Current assets Copyrights Royalty agreements Penske $ (742,000) 264,700 187,000 Not given. 80,000 (788,000) 498,000 990,000 Investment in Stanza Liabilities Common stock Additional paid-in capital 772,000 Not given (600,000) (600,000) ($20 par) (150,000) Stanza $ (652,000) 163,000 224,000 0 60,000 (330,000) 598,000 384,000 1,190,000 0 (1,357,088) (200,000) ($10 par) (80,000) Note: Parentheses indicate a credit balance. On January 1, 2024, Penske acquired all of Stanza's outstanding stock for $829,000 fair value in cash and common stock. Penske also paid $10,000 in stock Issuance costs. At the date of acquisition, copyrights (with a six-year remaining life) have a $456,000 book value but a fair value of $660,000. Required: a. As of December 31, 2024, what is…

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