Can you help me with accounting question Tech Nova Inc. acquired all the outstanding shares ofCloudSync Ltd. for $25 million. The book value ofCloudSync's net assets was $15.2 million. The fairvalues of all assets and liabilities matched theirbook values, except for patented technology, whichhad a fair value $4.3 million higher than its bookvalue.

Step 1: Definition of GoodwillGoodwill is an intangible asset that arises when a company acquires…

Answered: Tech Nova Inc. acquired all the…

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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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?
Pro-tech Software acquired all of the outstanding stock of Reliable Software for $14 million. The book value of Reliable’s net assets (assets minus liabilities) was $8.3 million. The fair values of Reliable’s assets and liabilities equaled their book values with the exception of certain intangible assets whose fair values exceeded book values by $2.5 million. Calculate the amount paid for goodwill.
At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $51 million. At the time of purchase, the carrying value of Sky Tech's net assets was $80 million. The fair value of Sky Tech's depreciable assets was $20 million in excess of their book value. For this yeat, Sky Tech reported a net income of $80 million and declared and paid S20 million in dividends. The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is: Multiple Choice $6.0 million. $20 million. $30 million. None of these answer choices are correct.
Python acquired 75% of Slither's stock for $316 million in cash on January 2, 2015. The fair value of the noncontrolling interest in Slither was $89 million. Slither's book value at that time was $120 million. The assets and liabilities reported on Slither's balance sheet had balances that approximated fair value at the date of acquisition. However, Slither had previously unreported developed technology (10 year life, straight-line), valued at $40 million. There has been no impairment loss on the developed technology since acquisition. Goodwill was impaired $6 million in 2015, and a $3 million impairment loss should be recorded for 2016. It is now December 31, 2016. The trial balances of Python and Slither appear below. (in thousands) Current assets Plant assets, net Python Dr (Cr) $ 113,500 1,200,000 323,800 Slither Dr (Cr) $ 35,000 500,000 Investment in Slither - Liabilities (1,342,950) (387,000) Capital stock (40,000) (20,000) Retained earnings, Jan. 1 (215,000) (110,000)…
Python acquired 75% of Slither’s stock for $316 million in cash on January 2, 2015. The fair value of the noncontrolling interest in Slither was $89 million. Slither’s book value at that time was $120 million. The assets and liabilities reported on Slither’s balance sheet had balances that approximated fair value at the date of acquisition. However, Slither had previously unreported developed technology (10 year life, straight-line), valued at $40 million. There has been no impairment loss on the developed technology since acquisition. Goodwill was impaired $6 million in 2015, and a $3 million impairment loss should be recorded for 2016. It is now December 31, 2016. The trial balances of Python and Slither appear below. (in thousands) Python Dr (Cr) Slither Dr (Cr) Current assets $ 113,500 $ 35,000 Plant assets, net 1,200,000 500,000 Investment in Slither 323,800 – Liabilities (1,342,950) (387,000) Capital stock (40,000) (20,000) Retained earnings, Jan. 1 (215,000) (110,000)…
At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $45 million. At the time of purchase, the carrying value of Sky Tech's net assets was $75 million. The fair value of Sky Tech's depreciable assets was $15 million in excess of their book value. For this year, Sky Tech reported a net income of $75 million and declared and paid $15 million in dividends.The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is:
On January 1, 2022, Pop Co. acquired 75% of the outstanding common shares of Soda Inc. for $161,250 cash. On that date, Soda had common shares of $156,250 and retained earnings of $31,250. At acquisition, the identifiable assets and liabilities of Soda had fair values that were equal to carrying amounts except for inventory, which had fair value $8,000 greater than carrying amount and plant and equipment, which had fair values $10,000 greater than carrying amounts. The plant and equipment had a remaining useful life of 5 years on January 1, 2022.Any goodwill will be tested yearly for impairment. Balance sheets as of December 31, 2022 are presented below: Cash Accounts receivable Inventory Land Plant & Equipment, net Investment in Soda Inc. - equity Current liabilities Bonds payable Common shares Retained earnings Pop Co. $ 10,000 Soda Inc. $ 5,000 38,750 42,250 75,250 62,500 50,000 100,000 150,000 175,000 168,500 $384,750 $492,500 $ 45,500 - 338,000 109,000 $492,500 $ 47,125 128,125…
On January 1, 2023, Palka, Incorporated, acquired 70 percent of the outstanding shares of Sellinger Company for $1,328,600 in cash. The price paid was proportionate to Sellinger's total fair value, although at the acquisition date, Sellinger had a total book value of $1,660,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger's accounting records by $228,000. On January 1, 2024, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $510,000 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger. During the two years following the acquisition, Sellinger reported the following net income and dividends: Items Net income Dividends declared. Required: a. Show Palka's journal entry to record its January 1, 2024, acquisition of an additional 25 percent ownership of Sellinger Company shares. b.…
On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1,666,000 in cash. The price paid was proportionate to Sellinger’s total fair value, although at the acquisition date, Sellinger had a total book value of $2,070,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger’s accounting records by $300,000. On January 1, 2018, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $656,250 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger. During the two years following the acquisition, Sellinger reported the following net income and dividends: 2017 2018 $525,000 $701,000 Net…
On January 1, 2023, Palka, Incorporated, acquired 70 percent of the outstanding shares of Sellinger Company for $1,232,700 in cash. The price paid was proportionate to Sellinger's total fair value, although at the acquisition date, Sellinger had a total book value of $1,490,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger's accounting records by $261,000. On January 1, 2024, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $511,875 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger. During the two years following the acquisition, Sellinger reported the following net income and dividends: Items Net income Dividends declared 2023 $ 570,000 160,000 Required A Required B $ Required: a. Show Palka's journal entry to record its January 1, 2024, acquisition of an additional 25…
On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1,141,000 in cash. The price paid was proportionate to Sellinger’s total fair value, although at the acquisition date, Sellinger had a total book value of $1,380,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger’s accounting records by $240,000. On January 1, 2018, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $415,000 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger.During the two years following the acquisition, Sellinger reported the following net income and dividends:Show Palka’s journal entry to record its January 1, 2018, acquisition of an additional 25 percent ownership of Sellinger Company shares.Prepare a schedule showing Palka’s December 31, 2018, equity…
XYZ Co had the following accounts at the time it was acquired by ABC Inc (see image below). ABC paid P1,400,000 for the net assets of XYZ. It was determined that the fair market value of inventories and PPE were P133,000 and P900,000 respectively. There is an assumed contingent liability arising from past events with a fair value amounting to P10,000 and such amount is considered a reliable measurement. Compute for a) Cost of Acquisition and b) goodwill or gain from acquisition

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