On January 1, 2022, Horizon Corp. purchases Summit Co. for $2.5 million in cash. Summit' s balance sheet dated December 31, 2021, reports $1.8 million in total net assets. An analysis conducted by Horizon on December 31 indicates that the book value of Summit' s tangible assets is $150,000 lower than their fair value. The analysis also shows that the fair value of Summit' s identifiable intangible assets exceeds their book value by $200,000. What amount of goodwill should Horizon record when accounting for its purchase of Summit?
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- Star Company purchases Stripe Inc. for $13,985,000 cash on January 1, 2024. The book value of Stripe Inc. net assets reported on its December 31, 2023 statement of financial position was $12,620,000. Star’s December 31, 2023 analysis indicated that the fair value of Stripe’s tangible assets exceeded the book value by $560,000, and the fair value of identifiable intangible assets exceeded book value by $245,000. How much goodwill should be recognized by Star Company when recording the purchase of Stripe Inc.? $Zebra Company purchases Glow Inc. for $13,985,000 cash on January 1, 2023. The book value of Glow Inc. net assets reported on its December 31, 2022 statement of financial position was $12,620,000. Zebra’s December 31, 2022 analysis indicated that the fair value of Glow’s tangible assets exceeded the book value by $560,000, and the fair value of identifiable intangible assets exceeded book value by $245,000. How much goodwill should be recognized by Zebra Company when recording the purchase of Glow IncD. Star Company purchases Stripe Inc. for $13,985,000 cash on January 1, 2024. The book value of Stripe Inc. net assets reported on its December 31, 2023 statement of financial position was $12,620,000. Star’s December 31, 2023 analysis indicated that the fair value of Stripe’s tangible assets exceeded the book value by $560,000, and the fair value of identifiable intangible assets exceeded book value by $245,000. How much goodwill should be recognized by Star Company when recording the purchase of Stripe Inc.? $ E. Benz Co. incurred research and development costs in 2024 as follows: Materials used in research and development projects $ 450,000 Equipment acquired that will have alternate future uses in future research and development projects 3,000,000 Depreciation for 2024 on above equipment 300,000 Personnel costs of persons involved in research and development projects 750,000 Consulting fees paid to outsiders for research and development…
- Floyd Company purchases Haeger Company for $2,400,000 cash on January 1, 2021. The book value of Haeger Company’s net assets, as reflected on its December 31, 2020 balance sheet is $1,860,000. An analysis by Floyd on December 31, 2020 indicates that the fair value of Haeger’s tangible assets exceeded the book value by $180,000, and the fair value of identifiable intangible assets exceeded book value by $135,000. How much goodwill should be recognized by Floyd Company when recording the purchase of Haeger Company?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 $75,000On September 3, 2024, the Robers Company exchanged equipment with Phifer Corporation. The facts of the exchange are as follows: Phifer's Asset $ 155,000 75,000 71,500 To equalize the exchange, Phifer paid Robers $8,000 in cash. Original cost Accumulated depreciation Fair value Required: Record the exchange for both Robers and Phifer. The exchange has commercial substance for both companies. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet
- The following information concerns the intangible assets of Epstein Corporation:a. On June 30, 2021, 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, 2021, 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, 2021.2. Prepare the intangible asset section of the December 31, 2021, balance sheet.Pharoah Corp., reporting under ASPE, has provided the following information regarding its intangible assets: 1. A patent was purchased from Marvin Inc. for $1.1 million on January 1, 2019. Pharoah estimated the patent’s remaining useful life to be 10 years. The patent was carried in Marvin’s accounting records at a carrying amount of $1,400,000 when Marvin sold it to Pharoah. On January 1, 2020, because of recent events in the field, Pharoah estimates that the remaining life of this patent is only five years from January 1, 2020. 2. During 2020, a franchise was purchased from Burr Ltd. for $304,000. As part of the deal, Burr must also be paid 6% of revenue from the franchise operations. Revenue from the franchise for 2020 was $1.2 million. Pharoah estimates the franchise’s useful life to be 10 years and takes a full year’s amortization in the year of purchase. 3. Pharoah incurred the following research costs in 2020: Materials and equipment $81,200 Personnel…The following information concerns the intangible assets of Baez Corporation: On June 30, 2024, Baez completed the acquisition of the Johnstone Corporation for $1,580,000 in cash. The fair value of the net identifiable assets of Johnstone was $1,350,000. Included in the assets purchased from Johnstone was a patent that was valued at $60,200. The remaining legal life of the patent was 12 years, but Baez believes that the patent will only be useful for another seven years. Baez acquired a franchise on October 1, 2024, by paying an initial franchise fee of $154,800. The contractual life of the franchise is 9 years. Required: Prepare year-end adjusting journal entries to record straight-line amortization expense of the intangibles at December 31, 2024. Prepare the intangible asset section of the December 31, 2024, balance sheet.
- In 2021, Colburn Inc. had acquired Pebble Co. and recorded goodwill of $245 million as a result. The net assets (including goodwill) from Colburn's acquisition of Pebble Co. had a 2022 year-end book value of $580 million. Colburn assessed the fair value of Pebble at this date to be $700 million, while the fair value of all of Pebble 's identifiable tangible and intangible assets (excluding goodwill) was $550 million. The amount of the impairment loss that Colburn would record for goodwill at the end of 2022 is: $0. $95 million. $150 million. None of the above is correct.During 2021, Cullumber Company purchased the net assets of Riverbed Corporation for $2206600. On the date of the transaction, Riverbed had $601800 of liabilities. The fair value of Riverbed's assets when acquired were as follows: Current assets $1083240 Noncurrent assets 2527560 $3610800 How should the $802400 difference between the fair value of the net assets acquired ($3009000) and the cost ($2206600) be accounted for by Cullumber? O The current assets should be recorded at $1083240 and the noncurrent assets should be recorded at $1725160. O A deferred credit of $802400 should be set up and then amortized to income over a period not to exceed forty years. O The $802400 difference should be recognized as a gain. O The $802400 difference should be credited to retained earnings.On January 1, 2021, Smith Company sold a piece of machinery to Gaby Company for P1,900,000. Because of the entity's commitments to its customers to provide their needs for the next three years, Smith Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows: Fair value of machinery - P2,200,000 Carrying amount of machinery - P1, 700,000 Remaining useful life of the machinery - 8 years Lease term - 3 years Annual rent payable at the end of each year beginning, December 31, 2021- P500,000 Market rate of interest - 10% The present value of an ordinary annuity of 1 at 10% for 3 periods is 2.4869 The present value of an annuity due of 1 at 10% for 3 periods is 2.7355 1. How much is the interest expense for 2021 on the lease liability relating to the right retained in the sale-leaseback transaction? (round off your final answer to the nearest peso value)…