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?

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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