ProForm acquired 70 percent of ClipRite on June 30, 2023, for $910,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $10,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2024 financial statements are as follows: Items Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock ProForm $ (800,000) 535,000 100,000 (35,000) $ (200,000) $ (1,300,000) (200,000) 100,000 $ (1,400,000) $ 400,000 290,000 910,000 1,000,000 (300,000) $ 2,300,000 $ (600,000) (300,000) ClipRite $ (600,000) 400,000 100,000 0 $ (100,000) $ (850,000) (100,000) 50,000 $ (900,000) $ 300,000 700,000 0 600,000 (200,000) $ 1,400,000 $ (400,000) (100,000)

ProForm acquired 70 percent of ClipRite on June 30, 2023, for $910,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $10,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2024 financial statements are as follows: Items Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock ProForm $ (800,000) 535,000 100,000 (35,000) $ (200,000) $ (1,300,000) (200,000) 100,000 $ (1,400,000) $ 400,000 290,000 910,000 1,000,000 (300,000) $ 2,300,000 $ (600,000) (300,000) ClipRite $ (600,000) 400,000 100,000 0 $ (100,000) $ (850,000) (100,000) 50,000 $ (900,000) $ 300,000 700,000 0 600,000 (200,000) $ 1,400,000 $ (400,000) (100,000)

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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ProForm acquired 60 percent of ClipRite on June 30, 2020, for $1,140,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $15,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $760,000 at the acquisition date. The 2021 financial statements are as follows: Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/21 Totals Sales Cost of Goods Sold ProForm (900,000) 585,000 200,000 (48,000) $ (163,000) $ $ 500,000 390,000 1,140,000 2,000,000 (700,000) $ 3,330,000 $ (667,000) (400,000) (2,263,000) $ (3,330,000) Sales Cost of goods sold Operating expenses Dividend income Net income…
Tamara Corporation acquired XW Products on January 1, 2020 for $6,400,000, and recorded goodwill of $1,200,000 as a result of that purchase. At December 31, 2021, the XW Products Division had a fair value of $5,450,000. The net identifiable assets of the Division (excluding goodwill) had a fair value of $4,745,000 at that time. What amount of loss on impairment of goodwill should Tamara record in 2021? 16.
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Ashvin
On January 1 2021 ABC acquired 90% of DEF. Analysis of data relative to this purchase indicates that goodwill of P70,000 was acquired in this purchase. The goodwill is unimpaired. On July 1, 2021, DEF sold a patent to ABC. The sales price was P140,000. DEF's books value was P70,000. DEF estimates that the patent has a life of 5 years and no salvage value. It will use straight line depreciation. For 2023, ABC's net income is P560,000 from its own operations. DEF had net income of P140,000. The 2023 net income attributable to equity holders of ABC is: 623,000 616,000 637,000 629,300
s
On January 1, 2021 ABC acquired 90% of DEF. Analysis of data relative to this purchase indicates that goodwill of $70,000 was acquired in this purchase. The goodwill is unimpaired. On July 1, 2021, DEF sold a patent to ABC. The sales price was $140,000. DEF's book value was $70,000. DEF estimates that the patent has a life of 5 years and no salvage value. It will use straight line depreciation. For 2023, ABC's net income is $560,000 from its own operations. DEF had net income of $140,000. The 2023 net income attributable to equity holders of ABC is: O 629,300 O 637,000 O 616,000 O 623,000
HOW MUCH IS THE GOODWILL ON THE BUSINESS COMBINATION?
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
Required information [The following information applies to the questions displayed below.] In 2022, Alliant Corporation acquired Centerpoint Incorporated for $352 million, of which $62 million was allocated to goodwill. At the end of 2024, management has provided the following information for a required goodwill impairment test: Fair value of Centerpoint Incorporated Book value of Centerpoint's net assets (excluding goodwill) Book value of Centerpoint's net assets (including goodwill) $ 256 million 228 million 290 million 2. Determine the amount of goodwill reported in the year-end 2024 balance sheet. 3. Determine the amount of the impairment loss assuming that the fair value of Centerpoint is $318 million. Note: For all requirements, enter your answer in millions (i.e., 10,000,000 should be entered as 10). 2. Goodwill 3. Impairment loss million million
ProForm acquired 70 percent of ClipRite on June 30, 2023, for $1,400,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $640,000 was recognized and is being amortized at the rate of $16,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $600,000 at the acquisition date. The 2024 financial statements are as follows Itens sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net Income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in cliptite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/24 Totals Proform $ (910,000) 590,000 210,000 (63,000) $ (173,000) $ (2,000,000) (173,000) 210,000 Sales Cost of goods sold Operating expenses Dividend income Net income attributable to noncontrolling interest Inventory Noncontrolling interest in subsidiary, 12/31/24 $…