Homework Help is Here – Start Your Trial Now!
Business
Accounting
Question 1 0/1 pts On May 1, Beta Co. reported the following account balances along with their estimated fair values: Receivables Inventory Copyrights Patented technology Carrying Amount Fair Value $ 219,000 $ 219,000 92,000 92,000 152,000 533,000 832,000 677,000 Total assets $ 1.295,000 $ 1.521,000 Current liabilities $ 256,000 $ 256,000 Long-term liabilities 685,000 673,000 Common stock 100,000 Retained earnings 254,000 Total liabilities and equities $ 1,295,000 On that day, Alpha paid cash $743,800 to acquire all of the assets and liabilities of Beta, which will cease to exist as a separate entity. To facilitate the merger, Alpha also paid $101,500 to an investment banking firm. The following information was also available: 1. Alpha further agreed to pay an extra $81,400 to the former owners of Beta only if they meet certain revenue goals during the next two years. Alpha estimated the present value of its probability adjusted expected payment for this contingency at $40,700. 2. Beta has a research and development project in process with an appraised value of $210,500. However, the project has not yet reached technological feasibility and the project's assets have no alternative future use. In recording acquisition of Beta, Alpha would record gain on bargain purchase of: $36,200. $0 $58,700. $18,000.

Question 1 0/1 pts On May 1, Beta Co. reported the following account balances along with their estimated fair values: Receivables Inventory Copyrights Patented technology Carrying Amount Fair Value $ 219,000 $ 219,000 92,000 92,000 152,000 533,000 832,000 677,000 Total assets $ 1.295,000 $ 1.521,000 Current liabilities $ 256,000 $ 256,000 Long-term liabilities 685,000 673,000 Common stock 100,000 Retained earnings 254,000 Total liabilities and equities $ 1,295,000 On that day, Alpha paid cash $743,800 to acquire all of the assets and liabilities of Beta, which will cease to exist as a separate entity. To facilitate the merger, Alpha also paid $101,500 to an investment banking firm. The following information was also available: 1. Alpha further agreed to pay an extra $81,400 to the former owners of Beta only if they meet certain revenue goals during the next two years. Alpha estimated the present value of its probability adjusted expected payment for this contingency at $40,700. 2. Beta has a research and development project in process with an appraised value of $210,500. However, the project has not yet reached technological feasibility and the project's assets have no alternative future use. In recording acquisition of Beta, Alpha would record gain on bargain purchase of: $36,200. $0 $58,700. $18,000.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
None
Question 1 0/1 pts On May 1, Beta Co. reported the following account balances along with their estimated fair values: Receivables Inventory Copyrights Patented technology Carrying Amount Fair Value $ 219,000 $ 219,000 92,000 92,000 152,000 533,000 832,000 677,000 Total assets $ 1.295,000 $ 1.521,000 Current liabilities $ 256,000 $ 256,000 Long-term liabilities 685,000 673,000 Common stock 100,000 Retained earnings 254,000 Total liabilities and equities $ 1,295,000 On that day, Alpha paid cash $743,800 to acquire all of the assets and liabilities of Beta, which will cease to exist as a separate entity. To facilitate the merger, Alpha also paid $101,500 to an investment banking firm. The following information was also available: 1. Alpha further agreed to pay an extra $81,400 to the former owners of Beta only if they meet certain revenue goals during the next two years. Alpha estimated the present value of its probability adjusted expected payment for this contingency at $40,700. 2. Beta has a research and development project in process with an appraised value of $210,500. However, the project has not yet reached technological feasibility and the project's assets have no alternative future use. In recording acquisition of Beta, Alpha would record gain on bargain purchase of: $36,200. $0 $58,700. $18,000.
Transcribed Image Text:Question 1 0/1 pts On May 1, Beta Co. reported the following account balances along with their estimated fair values: Receivables Inventory Copyrights Patented technology Carrying Amount Fair Value $ 219,000 $ 219,000 92,000 92,000 152,000 533,000 832,000 677,000 Total assets $ 1.295,000 $ 1.521,000 Current liabilities $ 256,000 $ 256,000 Long-term liabilities 685,000 673,000 Common stock 100,000 Retained earnings 254,000 Total liabilities and equities $ 1,295,000 On that day, Alpha paid cash $743,800 to acquire all of the assets and liabilities of Beta, which will cease to exist as a separate entity. To facilitate the merger, Alpha also paid $101,500 to an investment banking firm. The following information was also available: 1. Alpha further agreed to pay an extra $81,400 to the former owners of Beta only if they meet certain revenue goals during the next two years. Alpha estimated the present value of its probability adjusted expected payment for this contingency at $40,700. 2. Beta has a research and development project in process with an appraised value of $210,500. However, the project has not yet reached technological feasibility and the project's assets have no alternative future use. In recording acquisition of Beta, Alpha would record gain on bargain purchase of: $36,200. $0 $58,700. $18,000.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS