P Company wishes to acquire S Co. for cash in an asset acquisition, and appraisals reveal that the inventory has a fair value $185,000, and the equipment has a current value of $645,000. 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: PCo. $ 150,000 SCo. $ 30,000 Cash Inventory 450,000 150,000 Equipment (net) 1,320,000 570,000 Total $1.920,000 $750,000 Total liabilities $ 450,000 $150,000 Common stock, $20 par value Other contributed capital Retained earnings 600,000 300,000 375,000 105,000 495,000 195,000 Total $1,920,000 $750,000
P Company wishes to acquire S Co. for cash in an asset acquisition, and appraisals reveal that the inventory has a fair value $185,000, and the equipment has a current value of $645,000. 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: PCo. $ 150,000 SCo. $ 30,000 Cash Inventory 450,000 150,000 Equipment (net) 1,320,000 570,000 Total $1.920,000 $750,000 Total liabilities $ 450,000 $150,000 Common stock, $20 par value Other contributed capital Retained earnings 600,000 300,000 375,000 105,000 495,000 195,000 Total $1,920,000 $750,000
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...
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Question
![P Company wishes to acquire S Co.
for cash in an asset acquisition, and
appraisals reveal that the inventory
has a fair value $185,000, and the
equipment has a current value of
$645,000. 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:
P Co.
$ 150,000
Sco.
$ 30,000
Cash
Inventory
Equipment (net)
450,000
150,000
570,000
$750,000
1,320,000
Total
$1,920,000
$ 450,000
$150,000
Total liabilities
Common stock, $20 par value
Other contributed capital
Retained earnings
600,000
300,000
375,000
105,000
495,000
195,000
$1,920,000
$750,000
Total](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe538c0bf-7021-4d77-8e16-06b17ad21ffa%2Fcb865a11-6abf-4ab2-abdf-ad5ba09dee7a%2Feaab2e8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:P Company wishes to acquire S Co.
for cash in an asset acquisition, and
appraisals reveal that the inventory
has a fair value $185,000, and the
equipment has a current value of
$645,000. 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:
P Co.
$ 150,000
Sco.
$ 30,000
Cash
Inventory
Equipment (net)
450,000
150,000
570,000
$750,000
1,320,000
Total
$1,920,000
$ 450,000
$150,000
Total liabilities
Common stock, $20 par value
Other contributed capital
Retained earnings
600,000
300,000
375,000
105,000
495,000
195,000
$1,920,000
$750,000
Total
![Determine the purchase price above
which P Co. would record goodwill. *
O $705,000
O $700,000
O $710,000
O $695,000
None of the options is correct
O O O O O](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe538c0bf-7021-4d77-8e16-06b17ad21ffa%2Fcb865a11-6abf-4ab2-abdf-ad5ba09dee7a%2Fjzyzld1_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Determine the purchase price above
which P Co. would record goodwill. *
O $705,000
O $700,000
O $710,000
O $695,000
None of the options is correct
O O O O O
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