Kindly help me with accounting questions Pioneer Corp. recently acquired all of Sunset Ltd.'s net assets in a businessacquisition. The cash purchase price was $8.5 million. Sunset Ltd.'s assetsand liabilities had the following appraised values immediately prior to theacquisition:Land: $1.8 million Buildings: $3.6 million Inventory: $2.2 million Long-termnotes payable, for which Pioneer Corp. assumes payment responsibilities:$1.5 millionRequired: How much goodwill will result from this transaction?

Step 1: Calculation of Total Appraised AssetsLand = $1.8 millionBuildings = $3.6 millionInventory =…

Answered: Pioneer Corp. recently acquired all of…

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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On January 2, 2030, Esko Corp. acquired all the net assets of Tolits Inc. Esko Corp. paid P6,000,000 for the net assets of Tolits Inc. On this date, the following accounts of Tolits, Inc. are as follows: Cash – P150,000; Accounts Receivable – P1,600,000; Inventories – P600,000; Property, plant, and equipment – P2,600,000; Accounts Payable – P1,400,000. On the date of acquisition, it was determined that the fair values of inventories and property, plant, and equipment were P660,000 and P3,400,000, respectively. Esko Corp. has estimated a restructuring provision of P500,000 representing costs of exiting the activity of Tolits Inc., cost of terminating the employees of Tolits Inc. Compute the goodwill or gain from acquisition. * a. P 2,950,000 b. P 1,590,000 c. P 2,090,000 d. P 2,450,000 pls. answer it asap thank you:)
The following pertains to an entity's acquisitions of PPE during the year: (a) Purchased a new printing machine on Dec. 2 at an invoice price of P4,000,000 with terms 2/10, n/30. On Dec. 15, the entity paid the required amount for the machine. (b) Acquired an equipment by issuing P800,000, five-year 6% note. The entity's incremental borrowing rate is 14%. The annual payment of principal and interest on the note is to be P189,930. The asset has a cash price of P651,460. (c) Acquired a machine on Dec. 30 by issuing noninterest bearing note requiring three payments of P1,000,000. The first payment was made on the date of purchase, and the others are due annually on Dec. 30. The prevailing rate of interest for this type of note at date of issuance was 12%. The present value of an ordinary annuity of 1 at 12% is 1.69 for two periods and 2.40 for three periods. (d) The entity has a machine with a carrying amount of P450,000. Another entity has a delivery vehicle with a carrying…
Compute the gain or loss on the transfer of machinery
Kiwi Co. purchased another entity for P5,000,000 cash. The carrying amount and fair value were associated with this acquisition: Carrying Fair value amount Accounts receivable Inventory Government contract Equipment Short term loan payable 2,000,000 1,000,000 2,000,000 500,000 1,000,000 500,000 (2,000,000) 20,000,000 400,000 (oo0'0000) 1,400,000 Net assets The fair value associated with the acquired entity's government contract is not based on any legal or contractual relationship. In addition, for obvious reason, there is no open market trading for an intangible of this sort What is the goolwill arising from the acquisition?
Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $315,000. The estimated fair values of the assets are land, $60,000; building, $220,000; and equipment, $80,000. Journalize the purchase using the relative sales value method. Date Account Debit Credit MM/DD/YY 6 of 9
On July 1, 2023, Shamrock Inc. made two sales:1It sold excess land in exchange for a four-year, non-interest-bearing promissory note in the face amount of $1,079,350. Theland's carrying value is $540,000.2.It rendered services in exchange for an eight-year promissory note having a face value of $360,000. Interest at a rate of 3%is payable annually.The customers in the above transactions have credit ratings that require them to borrow money at 11% interest.Shamrock recently had to pay 8% interest for money it borrowed from British Bank.On July 1, 2023, Shamrock also agreed to accept an installment note from one of its customers in partial settlement ofaccounts receivable that were overdue. The note calls for four equal payments of $21,600, including the principal andinterest due, on the anniversary of the note. The implied interest rate on this note is 10%.The tables in this problem are to be used as a reference for this problem. Prepare the journal entries to record the three notes…
Adams, Inc., acquires Clay Corporation on January 1, 2020, in exchange for $713,300 cash. Immediately after the acquisition, the two companies have the following account balances. Clay’s equipment (with a five-year remaining life) is actually worth $641,000. Credit balances are indicated by parentheses. Adams Clay Current assets $ 382,000 $ 272,000 Investment in Clay 713,300 0 Equipment 837,000 584,000 Liabilities (202,000 ) (224,000 ) Common stock (350,000 ) (150,000 ) Retained earnings, 1/1/20 (1,380,300 ) (482,000 ) In 2020, Clay earns a net income of $74,100 and declares and pays a $5,000 cash dividend. In 2020, Adams reports net income from its own operations (exclusive of any income from Clay) of $160,000 and declares no dividends. At the end of 2021, selected account balances for the two companies are as follows: Adams Clay Revenues $ (544,000 ) $ (286,000 ) Expenses 394,400 214,500 Investment…
Adams, Inc., acquires Clay Corporation on January 1, 2020, in exchange for $713,300 cash. Immediately after the acquisition, the two companies have the following account balances. Clay’s equipment (with a five-year remaining life) is actually worth $641,000. Credit balances are indicated by parentheses. Adams Clay Current assets $ 382,000 $ 272,000 Investment in Clay 713,300 0 Equipment 837,000 584,000 Liabilities (202,000 ) (224,000 ) Common stock (350,000 ) (150,000 ) Retained earnings, 1/1/20 (1,380,300 ) (482,000 ) In 2020, Clay earns a net income of $74,100 and declares and pays a $5,000 cash dividend. In 2020, Adams reports net income from its own operations (exclusive of any income from Clay) of $160,000 and declares no dividends. At the end of 2021, selected account balances for the two companies are as follows: Adams Clay Revenues $ (544,000 ) $ (286,000 ) Expenses 394,400 214,500 Investment…
Columbia recently acquired all of Mercury's net assets in a business acquisition. The cash purchase price was $22,000,000. Mercury's assests and liabilites had the following costs and appraised values: Current assets Land, building and equipment Current liabilites Mortgage payable How much goodwill will rewult from this transaction? Cost Basis $ 6,000,000 $ 14,000,000 Appraised Value $ 6,000,000 $23,000,000 $4,000,000 $4,000,000 $ 10,000,000 $10,000,000
Action, Inc. acquired the following assets and assumed the related liabilities of Slacker Corp. in a transaction completed on February 16, 2023: Accounts receivable, net Inventories Property, plant & equipment Non-amortizable intangible assets Carrying value for Slacker Current liabilities Noncurrent liabilities $ 11,000 $ 50,000 $ 100,000 $ 200,000 Fair Value $ 10,000 $ 50,000 $ 150,000 $ 225,000 $ (40,000) $(200,000) $ (40,000) $(200,000) Action paid $205,000 in cash for all of the above from Slacker. a) Determine if Action must record any goodwill. Show any calculations. b) Record the acquisition in Action's general journal on Feb. 16, 2023. Show: any calculations. c) Prepare any adjusting entry for amortization required as of the fiscal year end, December 31, 2023. If no amortization is required, explain why.
[The following information applies to the questions displayed below.] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $810,000. The estimated market values of the purchased assets are building, $467,950; land, $257,850; land improvements, $47,750; and four vehicles, $181,450. Required: 1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $31,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3 Allocate the lump-sum purchase price to the separate assets purchased. Total cost of Acquisition Allocation of total cost…
How much goodwill will result?

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