Need help this question general accounting Pear Corporation purchased 100% of the net assets of SaltCorporation. Pearl Corporation paid $10,000,000 for net assetshaving a fair market value of $2,500,000. Pearl Corporation alsoreceived unrecorded identified intangibles with a value of$1,000,000.Prepare a workpaper that demonstrates the accounting for theabove business combination.

Step 1: Define GoodwillThere are some assets that are not physical in nature. These assets are…

Answered: Pear Corporation purchased 100% of the…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

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Chapter11: Long-term Assets

Section: Chapter Questions

Problem 10PA: Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth...

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Arizona Corporation acquired the business Data Systems for $320,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $260,000, liabilities of $40,000, and stockholders' equity of $220,000. An appraiser assessed the fair market value of the tangible assets at $250,000 at the date of acquisition. Arizona Corporation's financial condition just prior to the acquisition is shown in the following statements model. Required a. Compute the amount of goodwill acquired. b. Record the acquisition in a financial statements model like the preceding one. Complete this question by entering your answers in the tabs below. Required A Required B Record the acquisition in a financial statements model. Note: In the Statement of Cash Flows column, use the initials OA for operating activities, FA for financing activities, or IA for investing activity. Enter any cash outflows or decreases to account balances with a minus sign. Leave cells blank if no input is…
Arizona Corporation acquired the business Data Systems for $310,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $320,000, liabilities of $17,000, and stockholders' equity of $303,000. An appraiser assessed the fair market value of the tangible assets at $300,000 and liabilities at $17,000 at the date of acquisition. Arizona Corporation's financial condition just prior to the acquisition is shown in the following statements model. Balance Income Sheet Statement Assets Cash = + Liabilities + Tangible Assets ΝΑ + Stockholders Equity Goodwill Revenue Expenses = + ΝΑ = ΝΑ + Net Income 520,000 + Required 1.Compute the amount of goodwill acquired. 2.Record the acquisition in a financial statements model. Arizona Corporation's financial condition just prior to the acquisition is shown in the financial statements model. 3.Record the acquisition in general journal format. 520,000 NA Statement of Cash Flows ΝΑ = ΝΑ ΝΑ
arizona corp. acquired the business data systems for $320,000 cash and assumed all liabilites at the data of purchase. data's books showed tangible assets of $340,000, liabilities of $19,000, and stockholders' equity of $321,000. an appraiser assessed the fair market value of the tangible assets at $310,000 at the data of acquisition. a. compute the amount of goodwill acquired. b. record the acquisition in a financial statements model. Arizona corps. financial condition just prior to the aquistion is shown in the following statements model. cash paid- liabilites assumed- total- FMV of assets- goodwill-
Arca Salvage purchased equipment for $10,000. Arca recorded total depreciation of $8,000 on the equipment. Assume that Arca exchanged the old equipment for new equipment, paying $4,000 cash. The fair market value of the new equipment is $5,000. Journalize Arca's exchange of equipment. Assume this exchange has commercial substance. Let's begin by calculating the gain or loss on the exchange of equipment. (Enter a loss with a minus sign or parentheses.) Market value of assets received Less: Book value of asset exchanged Cash paid Gain or (Loss)
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The VV Company had these accounts at the time it was acquired by Bush Co.: Cash - P36,000; Accounts receivable - P457,000; Inventories - P120,000; Plant, property, and equipment - P696,400; and Accounts payable - P350,800. Bush Co. paid P1,400,000 for net assets of VV Company. It was determined that fair market values of inventories and plant, property, and equipment were P133,000 and P900,000, respectively. An assumed contingent liability arising from past events with a fair value amounting to P10,000 and such amount is considered a reliable measurement. Bush is the lessee of VV in an operating lease that is favorable for an amount of P50,000. In the books of Bush Co., this transaction resulted in: A. Goodwill recorded at P184,800 B. Goodwill is zero C. Goodwill recorded at P284,800 D. Goodwill recorded at P234,800
Parma Ltd purchased a parcel of assets and liabilities comprising a business directly from Pauls Pty Ltd. The parcel, measured at net fair values, consisted of: Balance of Accounts: Plant 250,000 Land 340,000 Vehicles 320,000 Accounts receivable 130,000 Accounts payable (148,000)Total 892,000 Required: Prepare journal entries to record the acquisition by Parma Ltd, if the cost of acquisition was $1,100,000 cash.
Mainline Produce Corporation acquired all the outstanding common stock of Iceberg Lettuce Corporation for $30,000,000 in cash. The book values and fair values of Iceberg's assets and liabilities were as follows: Current assets Property, plant, and equipment Other assets Current liabilities Long-term liabilities Required: 1. Calculate the amount paid for goodwill. 2. Determine the financial statement effects of the acquisition. Required 1 Required 2 Complete this question by entering your answers in the tabs below. Book Value $ 11,400,000 20,200,000 3,400,000 7,800,000 13,200,000 Assets Determine the financial statement effects of the acquisition. Note: Amounts to be deducted should be indicated with a minus sign. Enter your answer in millions rounded to 1 decimal place. (i.e. 5,500,000 should be entered as 5.5). Accounts Payable Accounts Receivable Accumulated Depreciation Advertising Expense Fair Value $ 14,400,000 26,200,000 4,400,000 7,800,000 12,200,000 Balance Sheet Liabilities…
Preston Company acquired the assets (except for cash) and assumed the liabilities of Saville Company. Immediately prior to the acquisition, Saville Company’s balance sheet was as follows: Book Value Fair Value Cash $129,480 $129,480 Receivables (net) 177,290 209,150 Inventory 362,130 412,850 Plant and equipment (net) 485,520 490,050 Land 440,090 647,770 Total assets $1,594,510 $1,889,300 Current Liabilities $586,310 $568,060 Common stock ($5 par value) 486,050 Other contributed capital 122,210 Retained earnings 399,940 Total equities $1,594,510 (a) Prepare the journal entries on the books of Preston Company to record the purchase of the assets and assumption of the liabilities of Saville Company if the amount paid was $1,428,550 in cash. (If no entry is required, select "No Entry" for the account titles and enter 0 for the…
Lexington Garden Supply paid $160,000 for a group purchase of land, building, and equipment. At the time of the acquisition, the land had a market value of $85,000, the building $51,000, and the equipment $34,000. Journalize the lump-sum purchase of the three assets for a total cost of $160,000, the amount for which the business signed a note payable. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit
Goodman Company exchanges an asset with The Pryce Corporation. Details of the exchange are as follows: Goodman’s Piece of equipment: Pryce’s building: Cost $800,000 Cost $960,000 Accumulated depreciation 230,000 Accumulated depreciation 350,000 Fair value 700,000 Fair value 850,000 Required- Prepare the journal entry in the books of both Goodman and Pryce, assuming both are public companies. Assume now that Goodman paid $80,000 in this transaction. Record the appropriate journal entry in Goodman books. Repeat b) assuming now that Goodman is a private company and that the fair value of Pryce’s building is the most determinable fair value.
Hoover Company acquired Burgess Company for $1,200,000 cash. The fair value of Burgess's assets was $1,040,000, and the company had liabilities of $60,000. Which of the following journal entries would be used to record the purchase of Burgess Company? Multiple Choice Burgess assets Burgess liabilities Goodwill Cash Burgess assets Cash 1,040,000 60,000 100,000 1,200,000 1,200,000 1,200,000

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