Record Corporation CD Inc. acquires 100% of the outstanding shares of Record Corp. for $1,200,000 and accounts for the transaction using the purchase method. Record Corp's balance sheet at the date of acquisition appears below Record, Corp Balance Sheet Acquisition Date Assets Cash Accounts Receivable Inventory Depreciable Assets less Accumulated Depreciation Note Receivable Goodwill Total Assets Liabilities and Equities Accounts Payable Note Payable Deferred Income Tax Liability Shareholders' Equity Total Liabilities and Equities Historical Cost $479,000 225,400 98,900 554,700 100,000 $1,450,000 $458.000 325,000 125,000 550,000 $1,458,000 Current Market Value $489,000 220,000 105,000 600,000 100,000 $450,000 325,000 125,000

Record Corporation CD Inc. acquires 100% of the outstanding shares of Record Corp. for $1,200,000 and accounts for the transaction using the purchase method. Record Corp's balance sheet at the date of acquisition appears below Record, Corp Balance Sheet Acquisition Date Assets Cash Accounts Receivable Inventory Depreciable Assets less Accumulated Depreciation Note Receivable Goodwill Total Assets Liabilities and Equities Accounts Payable Note Payable Deferred Income Tax Liability Shareholders' Equity Total Liabilities and Equities Historical Cost $479,000 225,400 98,900 554,700 100,000 $1,450,000 $458.000 325,000 125,000 550,000 $1,458,000 Current Market Value $489,000 220,000 105,000 600,000 100,000 $450,000 325,000 125,000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 35P

See similar textbooks

Similar questions

DEF company acquired the assets and assumed liabilities of GHI Company on January 1, 2022 by paying P3,000,000 and issuing its own ordinary shares. The comparison of the acquirer’s balance sheet before and after business combination transaction is as follows: Balance sheet before Acquisition Balance Sheet after Acquisition Total Assets 13,545,000 17,595,000 Total Liabilities 3,760,000 ? Total SHE 9,785,000 ? The fair value of the identifiable net asset of the acquiree is P4,835,000 and the book value of acquiree’s liabilities amounting to P1,300,000 is lower compared to its fair value by P350,000. DEF company paid acquisition related costs amounting to P50,000. What is the fair market value of the ordinary shares issued by the acquirer? a. 2,500,000 b. 2,400,000 c. 2,480,000 d. 2,450,000
If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P20 par valueshares with a fair value of P40 per share, incurs a mortgage loan for P90,000, pays P150,000 cash andpaying direct, indirect and stock issue costs of P75,000, P50,000 and P40,000 respective.REQUIREMENTS: Goodwill and Consolidated Total Assets at the date of acquisition
Bronze Corporation agrees to acquire the net assets of Wall Corporation on January 1, 20X1. Wall has the following balance sheet on the date of acquisition: Wall Corporation Balance Sheet January 1, 20X1 Assets Liabilities and Equity Accounts receivable . . . . . . . . . $ 79,000 Current liabilities . . . . . . . . . . . . . . $145,000 Inventory . . . . . . . . . . . . . . . . . . 112,000 Bonds payable . . . . . . . . . . . . . . . 100,000 Other current assets . . . . . . . . . . 55,000 Common stock . . . . . . . . . . . . . . . . 200,000 Equipment (net) . . . . . . . . . . . . . 294,000 Paid-in capital in excess of par . . . 50,000 Trademark . . . . . . . . . . . . . . . . . 30,000 Retained earnings . . . . . . . . . . . . . 75,000 Total assets. . . . . . . . . . . . . . . $570,000 Total liabilities and equity . . . . . $570,000 An appraiser determines that in-process R&D exists and has an estimated value of $14,000. The appraisal indicates that the following assets have fair…
Questions: a. How much is the Goodwill/Gain on Bargain Purchase? b. How much is the Consolidated Assets? c.
S acquired 100 percent of F for P275,000. At the date of acquisition, F had the following book and market values: (see image below) What is the amount of the “Investment in F” account on S’s financial records at the acquisition date? What amount of pre-acquisition earnings is eliminated in the acquisition date worksheet elimination? Please answer in good accounting form. Thank you!
If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P20 par valueshares with a fair value of P40 per share, incurs a mortgage loan for P90,000, pays P150,000 cash andpaying direct, indirect and stock issue costs of P75,000, P50,000 and P40,000 respective. REQUIREMENTS:A. GoodwillB. Consolidated Total Assets at the date of acquisition
Acquirer Company purchased the net asset of Acquiree Company (excluding cash) by paying P250,000 cash, issuing shares with a fair value of P1,810,000 and issuing a bond debenture with a fair value of P380,000 on January 2, 2022. The financial statements of Acquirer and Acquiree as of this date were as follows (see image below).The book value reflected the fair value of the assets and liabilities except that the inventory of Acquirer had a fair value of 1,500,000 and the inventory and equipment of Acquiree had fair values of P750,000 and P1,400,000 respectively. Acquirer also incurred the following costs: Finder’s fee – P10,000; Accountant’s fee – P15,000; Legal fees – P7,500; Printing of stock certificates – P5,000; and Audit and accountant’s fee related to stock issuance – P20,000. Acquirer only paid 50% of the said acquisition related costs. Answer the following: a. How much is the Consolidated Equity? b. How much is the Goodwill/Gain on Bargain Purchase? c. How much is the…
Acquirer Company purchased the net asset of Acquiree Company (excluding cash) by paying P250,000 cash, issuing shares with a fair value of P1,810,000 and issuing a bond debenture with a fair value of P380,000 on January 2, 2022. The financial statements of Acquirer and Acquiree as of this date were as follows (see image below).The book value reflected the fair value of the assets and liabilities except that the inventory of Acquirer had a fair value of 1,500,000 and the inventory and equipment of Acquiree had fair values of P750,000 and P1,400,000 respectively. Acquirer also incurred the following costs: Finder’s fee – P10,000; Accountant’s fee – P15,000; Legal fees – P7,500; Printing of stock certificates – P5,000; and Audit and accountant’s fee related to stock issuance – P20,000. Acquirer only paid 50% of the said acquisition related costs. Answer the following: a. How much is the Consolidated Equity? b. How much is the Goodwill/Gain on Bargain Purchase? c. How much is the…
E Company Ltd, a reporting entity, purchases all the issued shares of D Company Pty Ltd for $2,100,000. The net assets of D Company Pty Ltd at the date of acquisition consist of land $2,500,000 and a liability of $400,000 with these values representing their respective fair values. E Company Ltd will record the acquisition in its separate accounting records as follows: O a. Dr. Investment in D Company Pty Ltd $2,100,000 Cr. Issued Capital $2,100,000 O b. None of these options is correct O. Dr. Investment in D Company Pty Ltd $2,100,000 Cr. Cash $2,100,000 O d. Dr. Land $2,500.000 Cr. Liability $400,000 Cr. Cash $2,100,000
On December 31, 20X8, Paragraph Corporation acquired 80 percent of Sentence Company's common stock for $136,000. At the acquisition date, the book values and fair values of all of Sentence's assets and liabilities were equal. Paragraph uses the equity method in accounting for its investment. Balance sheet information provided by the companies at December 31, 20X8, immediately following the acquisition is as follows: Cash Accounts Receivable Inventory Fixed Assets (net) Investment in Sentence Co. Total Debits Accounts Payable Notes Payable Common Stock Retained Earnings Total Credits Assets Paragraph Corporation $ 74,000 120,000 180,000 Total Assets Liabilities and Stockholders' Equity 350,000 136,000 $860,000 Total Liabilities and Stockholders' Equity $ 65,000 350,000 150,000 295,000 $860,000 PARAGRAPH CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X8 Required: Prepare a consolidated balance sheet for Paragraph at December 31, 20X8. Sentence Company $ 20,000…
6. Tulip Company purchased the net assets of another entity for P2,000,000. On the sate of the transaction, the acquire had P800,000 of liabilities The assets of the acquiree at fair value were $1,900,000 for current assets and P1,600,000 for noncurrent assets. What is the amount of gain on bargain purchase? a. P 700,000 b. P-700,000 c. P 800,000 d. P-800,000
Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, fr $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies Included the following amounts as of the date of acquisition: Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation. Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Professor Corporation $ 50,300 90,000 Scholar Corporation $21,000 44,000 130,000 75,000 60,000 30,000 410,000 250,000 (150,000) (80,000) 102,200 $ 692,500 $340,000 $ 152,500 $ 35,000 250,000 180,000 80,000 40,000 210,000 85,000 $ 692,500 $340,000 At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except for Inventory, which had a fair value of $81,000, and…