On May 28, 2024, Pesky Corporation acquired all of the outstanding common stock of Harman, Incorporated, for million. The fair value of Harman's identifiable tangible and intangible assets totaled $540 million, and the fair val liabilities assumed by Pesky was $180 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2024. Managemen provided the following information: Fair value of Harman, Incorporated Fair value of Harman's net assets (excluding goodwill) 375 Book value of Harman's net assets (including goodwill) 458 $ 440 million million million

On May 28, 2024, Pesky Corporation acquired all of the outstanding common stock of Harman, Incorporated, for million. The fair value of Harman's identifiable tangible and intangible assets totaled $540 million, and the fair val liabilities assumed by Pesky was $180 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2024. Managemen provided the following information: Fair value of Harman, Incorporated Fair value of Harman's net assets (excluding goodwill) 375 Book value of Harman's net assets (including goodwill) 458 $ 440 million million million

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The Individual financial statements for Abbey Company and Bellstar Company for the year ending December 31, 2024, follow. Abbey acquired a 60 percent Interest in Bellstar on January 1, 2023, in exchange for various considerations totaling $420,000. At the acquisition date, the fair value of the noncontrolling interest was $280,000 and Bellstar's book value was $550,000. Bellstar had developed internally a trademark that was not recorded on its books but had an acquisition-date fair value of $150,000. This Intangible asset is being amortized over 20 years. Abbey uses the partial equity method to account for its Investment In Bellstar. Abbey sold Bellstar land with a book value of $70,000 on January 2, 2023, for $140,000. Bellstar still holds this land at the end of the current year. Bellstar regularly transfers Inventory to Abbey. In 2023, it shipped Inventory costing $130,000 to Abbey at a price of $200,000. During 2024, Intra-entity shipments totaled $250,000, although the original…
On January 1, 2022, Paulson Corporation purchased 65% of the outstanding common stock of Sun Company, which became a subsidiary of Paulson. No goodwill was reported on this acquisition. Differences between book value and fair value of the net identifiable assets of Sun Company on January 1, 2022, were limited to the following: Book value $ 19,000 Inventories (FIFO) Building (net) [remaining life: 5 years; straight-line depreciation; no salvage value] | 45,000 40,000 Sun's cost of goods sold was $38,000 in 2022. Sun reported an income of 20,000 in 2023. The noncontrolling interest in net income for the year ended December 31, 2023 (second year after business combination) was a. $7,350 b. $7,175 C. $6,825 d. $6,650 Fair value $ 18,500
A6 In 2022, Alliant Corporation acquired Centerpoint Incorporated for $339 million, of which $59 million was allocated to goodwill. At the end of 2024, management has provided the following information for a required goodwill impairment test: Fair value of Centerpoint Incorporated $ 247 milli Book value of Centerpoint’s net assets (excluding goodwill) 221 milli Book value of Centerpoint’s net assets (including goodwill) 280 milli Exercise 11-31 (Algo) Part 1 Require 1. Determine the amount of the impairment loss reported in the 2024 income statement. Note: Enter your answer in millions (i.e., 10,000,000 should be entered as 10).d:ononon
Placid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $630,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $6,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $530,000. Scenic reported net income of $340,000. Placid Lake declared $160,000 in dividends during this period; Scenic paid $63,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 370,000 $ 113,000 Land 830,000 430,000 Equipment (net) 630,000 530,000 During 2020, intra-entity sales of $190,000 (original cost of $88,000) were made. Only 20 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $320,000 in intra-entity sales were made…
On September 17, 2024, Ziltech, Incorporated, entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally accepted accounting principles. By December 31, 2024, the company's fiscal year - end, the division had not yet been sold, but was considered held for sale. The net fair value (fair value minus costs to sell) of the division's assets at the end of the year was $10 million. The pretax income from operations of the division during 2024 was $2 million. Pretax income from continuing operations for the year totaled $ 13 million. The income tax rate is 25 %. Ziltech reported net income for the year of $5.1 million. Required: Determine the book value of the division's assets on December 31, 2024.
Renz Co. acquired 80% of the voting common stock of Sogers Corp. on January 1, 2022. During 2022, Sogers had revenues of $2,700,000 and expenses of $2,100,000. The amortization of fair value allocations totaled $65,000 in 2022. Not including its investment in Sogers, Renz Co. had its own revenues of $4,800,000 and expenses of $3,600,000 for the year 2022. What amount of consolidated net income for 2022 should be allocated to Renz’s controlling interest in Sogers?
On January 1, 2018 Casey Corporation exchanged $3,210,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information systems. At the acquisition date, Casey prepared the following fair-value allocation schedule: Fair value of Kennedy (consideration transferred) Carrying amount acquired Excess fair value to buildings (undervalued) to licensing agreements (overvalued) to goodwill (indefinite life) Accounts Cash Accounts receivable Inventory Investment in Kennedy Buildings (net) Licensing agreements Goodwill Total assets Accounts payable Long-term debt Common stock Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records. Additional paid-in capital Retained earnings Total liabilities and equities $ Casey 480,000 1,420,000 1,490,000 3,210,000 5,992,500 0 $ 393,000…
Required information [The following information applies to the questions displayed below.] In 2022, Alliant Corporation acquired Centerpoint Incorporated for $352 million, of which $62 million was allocated to goodwill. At the end of 2024, management has provided the following information for a required goodwill impairment test: Fair value of Centerpoint Incorporated Book value of Centerpoint's net assets (excluding goodwill) Book value of Centerpoint's net assets (including goodwill) $ 256 million 228 million 290 million 2. Determine the amount of goodwill reported in the year-end 2024 balance sheet. 3. Determine the amount of the impairment loss assuming that the fair value of Centerpoint is $318 million. Note: For all requirements, enter your answer in millions (i.e., 10,000,000 should be entered as 10). 2. Goodwill 3. Impairment loss million million
Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $610,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $4,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $510,000. Scenic reported net income of $320,000. Placid Lake declared $200,000 in dividends during this period; Scenic paid $61,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 350,000 $ 111,000 Land 810,000 410,000 Equipment (net) 610,000 510,000 During 2020, intra-entity sales of $180,000 (original cost of $84,000) were made. Only 30 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $300,000 in intra-entity sales were made…
Carla Vista Corporation acquired End-of-the-World Products on January 1, 2020 for $6150000, and recorded goodwill of $1150000 as a result of that purchase. At December 31, 2021, the End-of-the-World Products Division had a fair value of $4482000. The net identifiable assets of the Division (including goodwill) had a carrying value of $5190000 at that time. What amount of loss on impairment of goodwill should Carla Vista record in 2021? $960000 $1668000 $0 $708000
Ma2. On May 28, 2024, Pesky Corporation acquired all of the outstanding common stock of Harman, Incorporated, for $420 million. The fair value of Harman's identifiable tangible and intangible assets totaled $512 million, and the fair value of liabilities assumed by Pesky was $150 million. Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2024. Management has provided the following information: Fair value of Harman, Incorporated $ 400 million Fair value of Harman’s net assets (excluding goodwill) 370 million Book value of Harman’s net assets (including goodwill) 410 million Required: Determine the amount of goodwill that resulted from the Harman acquisition. Determine the amount of goodwill impairment loss that Pesky should recognize at the end of 2024, if any. If an impairment loss is required, prepare the journal entry to record the loss
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.