On May 1, Soriano Company reported the following account balances along with their estimated fair values:Carrying Amount$ 245,30079,200Fair Value$ 245,30079,200505,500658,000125,500875,000$ 1,325,000$ 1,488,000$ 253,000729,800AccountReceivablesInventoryCopyrightsPatented technologyTotal assetsCurrent liabilitiesLong-term liabilitiesCommon stockRetained earnings$ 253,000740,000100,000232,000$ 1,325,000On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. Tofacilitate the merger, Zambrano also paid $100,000 to an investment banking firm.The following information was also available:• Zambrano further agreed to pay an extra $71,200 to the former owners of Soriano only if they meet certain revenue goals during thenext two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $35,600.• Soriano has a research and development project in process with an appraised value of $221,500. However, the project has not yetreached technological feasibility, and the project's assets have no alternative future use.Required:a. Determine whether there is a gain on bargain purchase or goodwill if $670,000 of cash was paid for Soriano.b. Determine whether there is a gain on bargain purchase or goodwill if $790,100 of cash was paid for Soriano. the givenanswers should be input and displayed as positive values.a. Determine whether there is a gain on bargain purchase or goodwill if $670,000 of cash was paid for Soriano.Cash paidContingent performance liabilityTotal consideration transferredFair value of net assetsGain on bargain purchasemplete this question. Allb. Determine whether there is a gain on bargain purchase or goodwill if $790,100 of cash was paid for Soriano.Cash paidContingent performance liabilityTotal consideration transferredFair value of net assetsGoodwill

The cost of investment includes the cash transferred, Fair value of assets transferred, fair value…

On May 1, Soriano Company reported the following account balances along with their estimated fair values: Carrying Amount $ 245,300 79,200 Account Receivables Inventory Copyrights Patented technology Total assets Current liabilities Long-term liabilities Common stock Retained earnings 125,500 875,000 $ 1,325,000 $ 253,000 740,000 100,000 232,000 $ 1,325,000 Fair Value $ 245,300 79,200 505,500 658,000 $ 1,488,000 $ 253,000 729,800

On May 1, Soriano Company reported the following account balances along with their estimated fair values: Carrying Amount $ 245,300 79,200 Account Receivables Inventory Copyrights Patented technology Total assets Current liabilities Long-term liabilities Common stock Retained earnings 125,500 875,000 $ 1,325,000 $ 253,000 740,000 100,000 232,000 $ 1,325,000 Fair Value $ 245,300 79,200 505,500 658,000 $ 1,488,000 $ 253,000 729,800

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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