On March 31, 2024, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $17,000,000 in cash. The book values and fair values of Barney's assets and liabilities were as follows: Current assets Property, plant, and equipment Other assets Current liabilities. Long-term liabilities. Required: Calculate the amount paid for goodwill. Goodwill Book Value $ 6,000,000 11,000,000 1,000,000 4,000,000 6,000,000 Fair Value $7,500,000 14,000,000 1,500,000 4,000,000 5,500,000

On March 31, 2024, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $17,000,000 in cash. The book values and fair values of Barney's assets and liabilities were as follows: Current assets Property, plant, and equipment Other assets Current liabilities. Long-term liabilities. Required: Calculate the amount paid for goodwill. Goodwill Book Value $ 6,000,000 11,000,000 1,000,000 4,000,000 6,000,000 Fair Value $7,500,000 14,000,000 1,500,000 4,000,000 5,500,000

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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Ashvin
1. On July 1, 2010, Jablonski Products purchased the net assets of Duquesne Industries for $285,000 (cash of $85,000 and a short-term note payable of $200,000). The assets included current assets of $125,000, property, plant, and equipment with a fair value of $250,000 (book value of $300,000), and a trademark valued at $150,000. Jablonski assumed liabilities totaling $200,000. The entry to record the purchase would include: O A) A debit to Goodwill of $40,000 B) A credit to Gain on Purchase of $90,000 O C) A credit to Goodwill of $40,000 D) A debit to Goodwill of $90,000 O E) A credit to Gain on Purchase of $40,000
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Fairgate Company’s 12/31/19 statement of financial position reports assets of $6,000,000 and liabilities of $2,500,000. All of the book values of Fairgate’s assets approximate their fair value, except for land, which has a fair value that is $400,000 greater than its book value. On 12/31/19, Morris Corporation paid $6,500,000 to acquire Fairgate. What amount of goodwill should Morris record as a result of this purchase?
What is the capitalized cost of the acquired PPE if ABC Corp. madethe following property acquisitions on Jan. 1, 2021:-Acquired a piece of land in exchange for its shares. The shareshave a total fair value of P5,000,000 while the fair value of theland is P5,100,000.-Purchased a machinery on installment. The cash price isP800,000 while the installment price is P1,000,000. It requireda down payment of P200,000 and the balance payable everyJan. 1 for 4 years, starting in the year 2022. Question 1. What is the capitalized cost?
Fairgate Company’s 12/31/21 statement of financial position reports assets of $6,000,000 and liabilities of $2,500,000. All of the book values of Fairgate’s assets approximate their fair value, except for land, which has a fair value that is $400,000 greater than its book value. On 12/31/21, Morris Corporation paid $6,500,000 to acquire Fairgate. What amount of goodwill should Morris record as a result of this purchase?
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(A) What is the capitalized cost of the acquired PPE if ABC Corp. made the following property acquisitions on Jan. 1, 2021: a. Acquired a piece of land in exchange for its shares. The shares have a total fair value of P5,000,000 while the fair value of the land is P5,100,000. b. Purchased a machinery on installment. The cash price is P800,000 while the installment price is P1,000,000. It required a down payment of P200,000 and the balance payable every Jan. 1 for 4 years, starting in the year 2022. 1. What is the capitalized cost? (B) ABC acquired for a lumpsum price of P6,000,000 a piece of land and the building on it. The land and building have fair values of P4,2000,000 and P2,800,000 respectively. The building is still usable but the entity plans to demolish it and construct a new building. Later, total demolition cost incurred was P400,000 but scraps were gathered and sold for P50,000. The new building had a total construction cost of P7,000,000, useful life of 25 years, and a…
At the beginning of 2022, Metatec Incorporated acquired Ellison Technology Corporation for $650 million. In addition to cash, receivables, and inventory, the following assets and their fair values were also acquired: Plant and equipment (depreciable assets) Patent Goodwill $ 155 million 45 million 120 million The plant and equipment are depreciated over a 10-year useful life on a straight-line basis. There is no estimated residual value. The patent is estimated to have a five-year useful life, no residual value, and is amortized using the straight-line method. At the end of 2024, a change in business climate indicated to management that the assets of Ellison might be impaired. The following amounts have been determined: Plant and equipment: Undiscounted sum of future cash flows Fair value Patent: Undiscounted sum of future cash flows Fair value Goodwill: Fair value of Ellison Technology Corporation Book value of Ellison's net assets (excluding goodwill) Book value of Ellison's net…
At the beginning of 2022, Metatec Incorporated acquired Ellison Technology Corporation for $590 million. In addition to cash, receivables, and inventory, the following assets and their fair values were also acquired: Plant and equipment (depreciable assets) $ 149 million Patent 39 million Goodwill 120 million The plant and equipment are depreciated over a 10-year useful life on a straight-line basis. There is no estimated residual value. The patent is estimated to have a five-year useful life, no residual value, and is amortized using the straight-line method. At the end of 2024, a change in business climate indicated to management that the assets of Ellison might be impaired. The following amounts have been determined: Plant and equipment: Undiscounted sum of future cash flows $ 79 million Fair value 59 million Patent: Undiscounted sum of future cash flows $ 20 million Fair value 13 million Goodwill: Fair value of Ellison Technology Corporation $…
Q.29.
Fifa Co. acquired the Green Co. on January 1,.1 2019 for £640,000,000, and recorded goodwill of £81,200 as a result of that purchase. At December 31, 2015, Green Co. had a recoverable amount of £568,000,000. The carrying value of the Fifa Company's net assets at December 31, 2019 was £592,000,000 (including goodwill). What amount of loss on impairment of goodwill should Fifa Co. ?record in 2019