Pro-tech Software acquired all of the outstanding stock of Reliable Software for $19 million. The book value of Reliable’s net assets (assets minus liabilities) was $8.8 million. The fair values of Reliable’s assets and liabilities equaled their book values with the exception of certain intangible assets whose fair values exceeded book values by $3.0 million. Calculate the amount paid for goodwill.

Pro-tech Software acquired all of the outstanding stock of Reliable Software for $19 million. The book value of Reliable’s net assets (assets minus liabilities) was $8.8 million. The fair values of Reliable’s assets and liabilities equaled their book values with the exception of certain intangible assets whose fair values exceeded book values by $3.0 million. Calculate the amount paid for goodwill.

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

Foxtrot Co. exchanged equipment and $17,100 cash for similar equipment. The book value and the fair value of the old equipment were $81,000 and $91,700, respectively. Assuming that the exchange lacks commercial substance, Foxtrot would record a gain/(loss) on exchange of assets in the amount of: Multiple Choice $(10,700). $0. $10,700. $27,800.
Equipment that cost $1,400,000 and has accumulated depreciation of $600,000 is exchanged for equipment with a fair value of $960,000 and $40,000 cash is paid. The exchange has commercial substance. The gain to be recognized from the exchange is
DUFFLE Corp. had the following data ascertained before liquidation: Total book value of the assets were P250,000. The book value of the inventories, P80,000 had an excess in the amount of P26,000 over its estimated fair value. The equipment’s estimated fair value had an excess in the amount of P2,500 over its book value of P120,000. Included in the book value of the assets was prepaid expenses of P18,000 which was considered worthless. Other assets not mentioned above have an estimated fair value which was P15,000 less than its book value. Total liabilities were P200,000. The accounts payable in the amount of P70,000 was secured by the inventories while the notes payable in the amount of P95,000 was secured by the equipment. Other liabilities not mentioned includes salaries and taxes in the amount of P12,500. What is the amount of net free assets? Group of answer choices 50,000 93,000 44,500 32,000
Tesla acquired Amazon, for $33,520,000. The fair value of all Amazon's identifiable tangible and intangible assets was $30,000,000. Short will amortize any goodwill over the maximum number of years allowed. What is the annual amortization of goodwill for this acquisition? Multiple Choice O O $880,000 $1,760,000 $O $3,520,000 < Prev 6 of 25 Save & Ex Next
handy snacks inc dominates the snack-food industry with its salty chip brand. assume that handy snacks inc purchased super snacks, Inc, for 5.2 million cash. the market value of super snacks assets is 9 million, and super snacks has liabilities with a market value of 7.1 million 1. compute the cost of the Goodwill purchased by handy snacks 2. explain how handy snacks will account for Goodwill in future years
ABC Company exchanged equipment with DEF Corp. The following data were available: ABC's equipment had a carrying value of P3,500,000 and fair value of P1.875,000. DEF's equipment has a fair value of P1,000,000 and carrying value of P1,200,000. DEF paid P700,000 cash to ABC. If the exchange has commercial substance, ABC would capitalize the new equipment at: 300,000 1,175,000 2,575,000 3,500,000
Blossom Corp. exchanged Building 24, which has an appraised value of $1,896,000, a cost of $2,722,000, and accumulated depreciation of $1,248,000, for Building M which belongs to Splish Ltd. Building M has an appraised value of $1,600,000, a cost of $3,182,000, and accumulated depreciation of $1,782,000. Splish paid Blossom the difference between the appraised values of the two buildings. Assume depreciation has been updated to the date of exchange. Prepare the entries on both companies' books, assuming the buildings are similar assets and there is no commercial substance for either company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles Blossom Corp. Buildings Accumulated Depreciation - Buildings Buildings Cash Debit 1243882 1248000 296000 Credit 2722000
Subject - account Please help me. Thankyou.
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 S Co. Identifiable Net Assets $1,160,000 $1,120,000 Fair Value SCo. Identifiable Net Assets $1,190,000 $1,210,000 Present value of Future Cash Flows $1,390,000 $1,400,000 * Identifiable net assets do not include goodwill. Year 2011 2012 Choose the correct answer: In year 2011 S Company had: * Excess of fair value over carrying value of $30,000 Excess of carrying value over fair value of $30,000 Excess of fair value over carrying value of $40,000 Excess of carrying value over fair value of $40,000 None of the options is correct
During its inception, Devon Company purchased land for $250,000 and a building for $200,000. After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary, Regan Company, in exchange for 20,000 shares of Regan's $10 par value stock. Devon uses straight-line depreciation. Useful life for the building is 20 years, with zero residual value. An appraisal revealed that the building has a fair value of $250,000. What will Devon record as Additional Paid in Capital as a result of this transaction? Group of answer choices additional paid-in capital of $0. additional paid-in capital of $270,000. additional paid-in capital of $350,000. additional paid-in capital of $300,000.
Goodman Company exchanges an asset with The Pryce Corporation. Details of the exchange are as follows: Goodman’s Piece of equipment: $800,000 230,000 700,000 Pryce's building: Cost Cost $960,000 350,000 850,000 Accumulated depreciation Accumulated depreciation Fair value Fair value Required- a) Prepare the journal entry in the books of both Goodman and Pryce, assuming both are public companies. b) Assume now that Goodman paid $80,000 in this transaction. Record the appropriate journal entry in Goodman books. c) 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.
CAKE Corporation exchanged a piece of equipment for new equipment. Data pertaining to the old equipment follows: Cost-P500,000; Accumulated Depreciation, P300,000; Fair value of old equipment, P180,000. The fair value of the new equipment is P230,000 and CAKE Corporation paid P50,000 to complete the exchange transaction. Assuming the configuration of the cash flows of the equipment is significantly different, how much is the gain or loss on exchange?