I want correct answer On January 1, 2017, Floyd Inc. purchases Haeger Inc. for $1.6million in cash. Haeger's balance sheet dated December 31,2016, reports $1.24 million in total net assets. An analysisconducted by Floyd on December 31 suggests that the bookvalue of Haeger's tangible assets is $120,000 lower than theirfair value. This analysis also indicates that the fair value ofHaeger's identifiable intangible assets exceeds their bookvalue by $90,000.Given this information, Floyd should record a goodwillamount of when recording its purchase of Haeger.

Step 1: Introduction to the Intangible AssetsIntangible assets are those assets that are related to…

Answered: On January 1, 2017, Floyd Inc.…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...

See similar textbooks

Similar questions

Floyd Company purchases Haeger Company for $800,000cash on January 1, 2011. The book value of Haeger Company’s netassets, as reflected on its December 31, 2010 balance sheet, is$620,000. An analysis by Floyd on December 31, 2010 indicates thatthe fair value of Haeger’s tangible assets exceeded the book valueby $60,000, and the fair value of identifiable intangible assetsexceeded book value by $45,000. How much goodwill should berecognized by Floyd Company when recording the purchase of HaegerCompany? $0 $180,000 $120,000 $75,000
On July 15, 2016, Cottonwood Industries sold a patent and equipment to Roquemore Corporation for $750,000 and $325,000, respectively. The book value of the patent and equipment on the date of sale were $120,000 and $400,000 (cost of $550,000 less accumulated depreciation of $150,000), respectively. Required: Prepare the journal entries to record the sales of the patent and equipment
On August 1, 2017, Concord Corporation acquired Skysong, Inc. for a cash payment of $2.10 million. At the time of purchase, Skysong's balance sheet showed assets of $4,350,000, liabilities of $2,550,000, and owners' equity of $1,800,000. The fair value of Skysong's identifiable assets is estimated to be $4,326,000. Compute the amount of goodwill acquired by Concord. Value assigned to goodwill $
The following information concerns the intangible assets of Epstein Corporation: a. On June 30, 2016, Epstein completed the acquisition of the Johnstone Corporation for $2,000,000 in cash. The fair value of the net identifiable assets of Johnstone was $1,700,000. b. Included in the assets purchased from Johnstone was a patent that was valued at $80,000. The remaining legal life of the patent was 13 years, but Epstein believes that the patent will only be useful for another eight years. c. Epstein acquired a franchise on October 1, 2016, by paying an initial franchise fee of $200,000. The contractual life of the franchise is 10 years. Required: 1. Prepare year-end adjusting journal entries to record amortization expense on the intangibles at December 31, 2016. 2. Prepare the intangible asset section of the December 31, 2016, balance sheet.
Pensacola Inc. purchased equipment on January 1, 2016 for $135,000. After 3 years Pensacola exchanged the equipment for a truck from Miami, Inc., in a non-monetary exchange. The balance in the Accumulated Depreciation account at the time of the exchange was $75,000. Assume the exchange lacks commercial substance. At the time of the exchange, the fair value of the equipment was $77,000 and the fair value of the truck was $57,000, Miami paid $20,000 cash/boot to Pensacola. What is the cost basis of the truck acquired by Pensacola? O $44,415 $52,585 O $57,000 $40,000 O None of the above
ABC Corporation acquired in 1/1/2010 a secon-hand piece of machinery by HZ Corporation in cash. In the records of the HZ Corporation the book value of the machinery at the date of the sale was €15,000. The invoice price of the machinery was €14,000, while the HZ corporation offered a cash discount of €1,000. In addition the HZ Corporation paid €150 and €470 for transportation expenses and installation costs respectively. The piece of machinery was ready for its intended use on 1/1/2010. According to its technical specification the machinery would have been fit for use for 20 years. The management of ABC corporation intended to use the machinery until 31/12/2019. The residual value of the machinery was estimated to €1,200. In 1/1/2018 a major overhaul of the machinery took place. As a consequence of the overhaul the production capacity of the machinery increased and the management of ABC decided that the machinery would have been used until 31/12/2022 when the residual value of the…
On August 1, 2017, Riverbed Corporation acquired Marin, Inc. for a cash payment of $2.30 million. At the time of purchase, Marin’s balance sheet showed assets of $4,422,000, liabilities of $2,622,000, and owners’ equity of $1,800,000. The fair value of Marin’s identifiable assets is estimated to be $4,330,000.Compute the amount of goodwill acquired by Riverbed.
On September 1, 2018, Vernon Corporation acquired Barlow Enterprises for a cash payment of $820.000. At the time of purchases. Barlow's balance sheet showed assets of $610.000. liabilities of $240.000, and owner's equity of $420.000. The fair value of Barlow's assets is estimated to be 5970.000.The liabilities are all estimated to be at fair value. a) Compute the amount of goodwill acquired by Vernon. 120000 b) On December 31, 2020, the fair value of Barlow as a reporting unit is estimated to be $720.000. The carrying value of Vernon's investment in Barlow at year-end is $750.000. The fair value of Barlow's identifiable net asset, excluding the goodwill, is determined to be 655.000 Prepare Vernon's journal entry, if necessary, to record impairment of goodwill. Please use the new standard (Hint: The FASB's new goodwill Impairment testing guidance- ASU 2017-04 is required for public SEC filers for periods beginning after December 15. 2019) Note: Please use integer only. Do not use a S.…
Bell Corporation purchases all of the outstanding stock of Stockdon Corporation for $220,000 in cash on January 1, 2017. On the purchase date, Stockdon Corporation has the following condensed balance sheet: (attached)Any excess of book value over cost is attributable to the building, which is currently overstated on Stockdon’s books. All other assets and liabilities have book values equal to fair values. The building has an estimated 10-year life with no salvage value.The trial balances of the two companies on December 31, 2017, appear as follows: Bell StockdonCash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000 143,000Inventory . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 60,000 30,000Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000 120,000Building (net) . . . . . . . . . . . . . . . . . .…
On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $150,000 in cash. The equipment had originally cost $135,000 but had a book value of only $82,500 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $510,000 in net income in 2018 (not including any investment income) while Brannigan reported $167,300. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $6,100 per year. a. What is consolidated net income for 2018? b. What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan? c. What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream? d. What is the consolidated net income for 2019 if Ackerman reports $530,000 (does not…
On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $450,500 cash. The fair value of Saab’s identifiable net assets was $374,980 on this date. Porsche Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Saab). The information for these subsequent years is as follows: Year Present Valueof Future Cash Flows Carrying Value ofSaab’s IdentifiableNet Assets* Fair ValueSaab’s IdentifiableNet Assets 2014 $400,620 $329,851 $339,983 2015 $399,230 $319,497 $345,596 2016 $350,150 $299,900 $325,360 * Identifiable net assets do not include goodwill. (a) For each year determine the amount of goodwill impairment, if any. 2014 2015 2016 Goodwill impairment $ $ $
On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $200,000 in cash. The equipment had originally cost $180,000 but had a book value of only $110,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method.Ackerman reported $300,000 in net income in 2018 (not including any investment income) while Brannigan reported $98,000. Ackerman attributed any excess acquisition-date fair value to Brannigan’s unpatented technology, which was amortized at a rate of $4,000 per year.a. What is consolidated net income for 2018?b. What is the parent’s share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan?c. What is the parent’s share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream?d. What is the consolidated net income for 2019 if Ackerman reports $320,000 (does not include…

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Auditing: A Risk Based-Approach to Conducting a Q…

Accounting

ISBN:

9781305080577

Author:

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

Publisher:

South-Western College Pub

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Auditing: A Risk Based-Approach to Conducting a Q…

Accounting

ISBN:

9781305080577

Author:

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

Publisher:

South-Western College Pub

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS