Riddick Co. purchased all of the outstanding stock of Vaako Inc. for $12,000,000. Vaako's book value was $8,500,000. The book values were the same as the fair value with the exception of the following: Patent was undervalued by $2,000,000 and Notes Payable was undervalued by $1,500,000. What is the fair value of Vaako's net assets?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Riddick Co. purchased all of the outstanding stock of Vaako Inc. for $12,000,000. Vaako's book value was $8,500,000.
The book values were the same as the fair value with the exception of the following: Patent was undervalued by $2,000,000 and Notes Payable was undervalued by $1,500,000. What is the fair value of Vaako's net assets?
Transcribed Image Text:Riddick Co. purchased all of the outstanding stock of Vaako Inc. for $12,000,000. Vaako's book value was $8,500,000. The book values were the same as the fair value with the exception of the following: Patent was undervalued by $2,000,000 and Notes Payable was undervalued by $1,500,000. What is the fair value of Vaako's net assets?
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