l touch ?1:28 PM49%Expert Q&ADoneP Company wishes to acquire SCo. for cash in an asset acquisition, andappraisals reveal that the inventory has a fair value $195,000, and the equipmenthas a current value of $625,000. The book value and fair value of liabilities arethe same. The following balance sheets were reported on January 1, 2011, for PCompany and S Company:S Co.$ 30,000P Co.Cash$ 150,000InventoryEquipment (net)450,000150,0001,320,000570,000Total$1,920,000$750,000$ 450,000Total liabilitiesCommon stock, $20 par valueOther contributed capitalRetained earnings$150,000600,000300,000375,000105,000495,000$1,920,000195,000Total$750,000Determine the purchase price above which P Co. would record goodwill.*O $705,000O $710,000O S700,000$695,000O None of the options is correctDetermine the purchase price at which P Co. would record a $30.000 gain."O $685,000O $670,000$690,000O s665.000O None of the options is correct

Goodwill on acquisition is arising on paying the amount over the net identifiable assets of the…

P Company wishes to acquire S Co. for cash in an asset acquisition, and appraisals reveal that the inventory has a fair value $195,000, and the equipment has a current value of $625,000. The book value and fair value of liabilities are the same. The following balance sheets were reported on January 1, 2011, for P Company and S Company: S Co. $ 30,000 P Co. Cash $ 150,000 Inventory 450,000 150,000 Equipment (net) Total 1,320,000 $1.920,000 570,000 $750,000 Total liabilities $ 450,000 $150,000 Common stock, $20 par value Other contributed capital Retained earnings 600,000 375,000 300,000 105,000 195,000 $750,000 495,000 Total $1,920,000 Determine the purchase price above which P Co. would record goodwill. O $705,000 $710,000 O $700,000 O $695,000 O None of the options is correct Determine the purchase price at which P Co. would record a $30.000 gain." O $685,000 O $670,000 O $690,000 O s665.000 O None of the options is correct O O O OO O O O OC

P Company wishes to acquire S Co. for cash in an asset acquisition, and appraisals reveal that the inventory has a fair value $195,000, and the equipment has a current value of $625,000. The book value and fair value of liabilities are the same. The following balance sheets were reported on January 1, 2011, for P Company and S Company: S Co. $ 30,000 P Co. Cash $ 150,000 Inventory 450,000 150,000 Equipment (net) Total 1,320,000 $1.920,000 570,000 $750,000 Total liabilities $ 450,000 $150,000 Common stock, $20 par value Other contributed capital Retained earnings 600,000 375,000 300,000 105,000 195,000 $750,000 495,000 Total $1,920,000 Determine the purchase price above which P Co. would record goodwill. O $705,000 $710,000 O $700,000 O $695,000 O None of the options is correct Determine the purchase price at which P Co. would record a $30.000 gain." O $685,000 O $670,000 O $690,000 O s665.000 O None of the options is correct O O O OO O O O OC

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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a. What is the consolidated net income for 2014? b. What is the consolidated sales for 2014?
S Company had the following balances at the time it was acquired by P Company:Cash P36,000Accounts receivable 457,000Inventories 120,000Property, plant and equipment 696,400Goodwill 200,000Accounts payable 350,800P Company paid P1.4M for the net assets of S Company. It was determined that fair market values of inventories and property, plant and equipment were P133,000 and P900,000, respectively.An assumed contingent liability with a fair value amounting to P20,000 and such amount is considered a reliable measurement. Also, a P50,000 future losses or reorganization/ restructuring costs are expected to be incurred as a result of the business combination.In the books of P Company, how will be the amount of Goodwill arising from business combination?
Mans Company is about to purchase the net assets of Eagle Incorporated, which has the following balance sheet: Assets Accounts receivable $ 60,000 Inventory 100,000 Equipment $ 90,000 Accumulated depreciation (50,000) 40,000 Land and buildings $300,000 Accumulated depreciation (100,000) 200,000 Goodwill 60,000 Total assets $460,000 Liabilities and Stockholders' Equity Bonds payable $ 80,000 Common stock, $10 par 200,000 Paid-in capital in excess of par 100,000 Retained earnings 80,000 Total liabilities and equity $460,000 Mans has secured the following fair values of Eagle's accounts: Inventory $130,000 Equipment 60,000 Land and buildings 260,000 Bonds payable 60,000 Acquisition costs were $20,000. Required: Record the entry for the purchase of…
2. Cinema Company acquired 75 percent of Movie Corporation's shares on December 31, 2015, at underlying book value of $98,000. At that date, the fair value of the noncontrolling interest was equal to 25 percent of the book value of Movie Corporation. Movie's balance sheet on January 1, 2018, contained the following balances: Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Total Assets $50,000 Accounts Payable 35,000 Bonds Payable 40,000 Common Stock 300,000 Additional Paid-In Capital (100,000) Retained Earnings $325,000 Total Liabilities and Equities $40,000 100,000 50,000 Prepare the entries recorded on the books of each company. 75,000 60,000 $325,000 On January 1, 2018, Movie acquired 3,500 of its own $2 par value comm on shares from Nonaffiliated Corporation for $6 per share.
On September 1, 2017, Winans Corporation acquired Aumont Enterprises for a cash payment of $700,000, At the time of purchase, Aumont's Balance sheet showed assets of $620,000 Liabilities of $200.000 and owners equity of $420,000, The fair value of Aumonts assets is estimated to be $800 000. Compute the amount of good will acquired by Winans. O S80 000 O $100.000 O $180 000 O All of the above
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On January 1, 2010, P Company acquired the net assets of S Company for $1,580,000 cash. The fair value of S Co. identifiable net assets was $1,310,000 on this date. P Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (S Co.). The information for these subsequent years is as follows: Carrying value of SCo. Identifiable Net Assets $1,160,000 $1,120,000 Fair Value S Co. Identifiable Net Assets $1,190,000 $1,210,000 Present value of Future Cash Flows $1,390,000 $1,400,000 Year 2011 2012 * Identifiable net assets do not include goodwil.
Mercedes Co. acquired all of the common stock of Tesla Co. on January 1, 2018. As of that date, Tesla had the following trial balance: Book Value Fair Value Current Assets $50,000 $50,000 Land $50,000 $100,000 Buildings (20 years) $200,000 $300,000 Equipment(10 years) $100,000 $80,000 Net Income year ended 12/31/18 $100,000 Dividends year ended 12/31/18 $10,000 Common Stock-Tesla ($10 par value) $50,000 Additional Paid-In Capital (5,000 shares outstanding) $250,000 Retained Earnings, 1/1/18 $100,000 Assume that Mercedes Co. acquired the common stock of Tesla for $600,000 in cash. Any excess of consideration transferred over fair value of assets and liabilities acquired is due to goodwill. Mercedes is using the equity method for this investment. NOTE: You will get no credit if I can’t read your answer.: (P3i) Prepare the S Entry for 12/31/2018 (Write the journal entry, print the name of the account(s) and write the dollar amounts clearly.) (Show below all calculations to get full…
CASE 1 Presented below are the financial balances for the BonGiovi Company and the Terens Company as of December 31, 2017, immediately before BonGiovi acquired Terens. Also included are the fair values for Terens Company's net assets at that date (thousands of US$). Terens Compute consolidated retained earnings as a result of this acquisition. A) $1,160. Compute consolidated revenues immediately following the acquisition. BonGiovi Book Value Terens Book Value B) $1,170. 31.12.2017 31.12.2017 Fair Value 31.12.2017 C) $1,265. Cash 870 240 240 Receivables 660 600 600 D) $1,280. Inventory 1,230 420 580 Land 1,800 260 250 E) $1,650. Buildings (Net) 1,800 540 650 Equipment (net) 660 380 400 Accounts Payable (570) (240) (240) Accrued expenses (270) (60) Long term Liabilities (2,700) (1,020) (60) (1,120) Common Stock (1,980) A) $3,540. ($20par) B) $2,880. Common Stock ($5 (420) par) C) $1,170. Additional paid in (210) (180) capital D) $1,650. Retained earnings (1,170) (480) Revenue (2,880)…